Savers can achieve ISA millionaire status through consistent investing, with a realistic 7% annual return after charges. Dan Coatsworth, head of markets at AJ Bell, outlines a straightforward path requiring maximum annual contributions.
Maximum Annual Investment Path
Investors who contribute the full £20,000 allowance each year—equivalent to £1,666.66 monthly—can reach £1 million in just over 21 years and 10 months. Coatsworth notes: “Becoming an ISA millionaire needn’t be a fantasy if you are diligent with saving and investing. Even though you might have to make some sacrifices along the way, the rewards certainly make it worthwhile.”
A More Realistic Contribution Level
Not everyone can invest the maximum amount annually. A more achievable £1,200 monthly contribution at 7% returns would build to £1 million in 25 years and nine months. Coatsworth adds: “If you’re in your thirties or early forties and feel like it’s time to get serious about investing, these figures could provide the pick-me-up you need to form a plan and get going.”
Keys to Investment Success
Success demands discipline. Coatsworth advises: “Form a plan, don’t miss a monthly payment into your ISA, and stick with it through good and bad times. It’s just like eating healthily and exercising regularly—stick at it, and you could see big results.”
Essential Precautions from the FCA
The Financial Conduct Authority (FCA) urges investors to proceed only with disposable funds after securing an emergency fund and clearing debts. Avoid using credit cards for investments and fully grasp the risks involved. The FCA warns: “While most investors like the idea of high returns, they often come with an increased risk of losing your money. With high-risk investments, you should be prepared to lose all of your money.”
Investors should also scrutinize products promising unrealistic returns, as they may signal scams. Additional guidance is available on the FCA website.
