The Stocks and Shares ISA gives people one of their best chances to build serious retirement wealth. Its huge tax advantages give investors more cash to reinvest and compound, turbocharging long-term returns.
That’s only one side of the story though. These particular ISAs are designed to harness the wealth-boosting power of the stock market. The result? Users have enjoyed an average 9.64% annual return over the past decade.
The question is, how many people have made £1,000,000 or more with the stocks ISA? The number may be higher than you think…
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Millionaire’s row
According to HMRC, there are 5,070 ISA millionaires in the UK. But here’s the thing: that figure’s based on data from April 2023, so the number is likely to be far greater today.
According to asset manager Rathbones, “the number of ISA millionaires has at least doubled every three years since 2016“. And it thinks the number of people with £1m-plus portfolios had risen to:
- 7,100 by April 2024.
- 9,510 by April 2025.
- 13,100 by April 2026.
More huge sums
No-one’s saying that creating a million-pound portfolio is easy. Yet by targeting high-performing assets like shares, and offering tax benefits that can boost compound returns, the Stocks and Shares ISA helps even those achieving average underlying returns build a large retirement pot.
HMRC also says that as of April 2023, there were:
- 48,160 people with ISAs of between £500,000 and £749,999.99.
- 5,940 with ISAs of £750,000 to £849,999.99.
- 3,490 with ISAs between £850,000 and £949,999.99.
- 1,210 with ISAs of £950,000 to £999,999.99.
And here’s the thing. You don’t need huge cash lump sums or some crazy luck to build a portfolio of that size. Patience, a commitment to regular investing, and following some well-worn strategies can set you on your way.
What could £400 a month make?
For around the last 75 years, the stock market’s delivered an average annual return of roughly 9%. At this rate, someone who puts £400 into a Stocks and Shares ISA each month for 30 years would have made an impressive £732,297 to retire on.
Investors may need a diversified portfolio to make this sort of cash, to reduce risk and seize different investment opportunities. This can be achieved by buying individual shares, as well as with tracker funds that follow an index like the S&P 500.
I hold the HSBC S&P 500 ETF (LSE:HSPX) alongside roughly 20 other stocks and funds in my own portfolio. I’d be foolish not to — this fund spreads risk across hundreds of different US stocks yet, at the same time, doesn’t compromise on performance. Since mid-2016, it’s delivered an average annual return of 14.9%.
Can this tracker keep delivering though? If investors continue rotating out of US stocks more generally, perhaps not. But on balance, I’m optimistic it can, driven by tech trends like AI that are fuelling explosive earnings growth.
Should you invest £5,000 in Rolls Royce right now?
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Royston Wild owns shares in HSBC S&P 500 ETF
