The number of Isa millionaires has jumped substantially in the past three years, exclusive data from Rathbones for This is Money reveals.

At the start of the 2023/24 tax year, 5,070 people held Isa portfolios worth £1million or more, a Freedom of Information request to HMRC previously revealed.

But a new FOI by the wealth management firm for This is Money shows it is likely 17,600 investors will have hit the fabled Isa millionaire status by the end of this current tax year, which ends in two weeks’ time.

Data shows that 48,160 individuals had Isa holdings between £500,000 and £750,000 in 2023/24 and 1,210 were on the brink of Isa millionaire status, worth between £950,000 and £1million.

Now, new analysis by Rathbones suggests the number of Isa millionaires will have risen to 17,600 by April 2026 assuming 8 per cent annual investment growth and full use of the £20,000 Isa allowance each year.

Under higher return assumptions, the number could have grown further still.

The figures assume uninterrupted saving behaviour, with investors close to £1million gradually crossing the threshold over the three‑year period.

Historically, the number of Isa millionaires has at least doubled every three years since 2016, and more than trebled during periods when MSCI World returns exceeded 15 per cent, Rathbones says. 

With global equities delivering annualised returns of 17.4 per cent since April 2023, conditions are similar to those previously associated with rapid growth in Isa millionaire numbers.

Angela Smith, senior investment director at Rathbones, said: ‘Our analysis of the data suggests the number of Isa millionaires is likely to have risen significantly over a relatively short period, even on modest assumptions.

‘This means many more investors are now benefiting from tax-free growth, income and dividends on seven-figure portfolios.

‘Our experience with clients shows that the not-so-secret ingredients behind building an Isa millionaire portfolio are patience, time, consistently using allowances, and avoiding interruptions to the power of compounding.’

Rathbones says that even if savers stopped contributing to their Isas altogether after April 2023, an 8 per cent annual return could still lift the number of Isa millionaires from 5,070 to around 7,100 by April 2024, nearly 9,510 by April 2025 and almost 13,100 by April 2026.

Under a more cautious assumption of 5 per cent annual investment returns, the number of Isa millionaires would still have risen to 12,300 by April 2026 if the allowance were fully used each year, or to 9,300 if no further contributions were made.

The growth reflects a powerful combination of investment growth, the long-term impact of compounding within a tax-free wrapper, and disciplined use of annual Isa allowances over many years.

However, investors should also factor in inflation when thinking about building seven-figure pots.

Angela Smith adds: ‘Even after investment gains, £1million is no longer what it used to be. To have the same £1million buying power as 20 years ago, investors today would need £1.7million.

‘Inflation steadily erodes purchasing power, which is why saving alone is rarely enough. 

‘Investing wisely – across assets such as shares and funds – can help deliver returns that outpace inflation and protect and grow wealth over the long term.’

Several investment platforms in recent months say the numbers of Isa millionaire customers has ballooned.

Investment platform AJ Bell revealed the number of millionaires who invest it has jumped 74 per cent in a year, while Interactive Investor saw a 79 per cent jump in Isa millionaires on its platform, rising from 1,607 one year ago to 2,869.

Isa millionaires have one thing in common: they all built their fortunes through stocks and shares Isas – 94 per cent of Isa millionaires are fully invested in stocks and shares while the remaining 6 per cent made their £1million fortune through a mix of stocks and shares and cash Isas.

Angela adds: ‘Many Isa millionaires didn’t sprint their way there – most started out with Personal Equity Plans (Peps) long before Isas existed.

‘They built good habits, avoided common pitfalls, and let time and discipline do the heavy lifting.

‘The not-so-secret ingredient to building a large Isa isn’t perfect timing or extraordinary risk-taking, but patience, time, and iron-clad discipline to keep investing and resist the temptation or tinker unnecessarily.’

Her tips to become an Isa millionaire? Start early, use pay rises as built-in boosts, don’t interrupt compounding, use as much of your limit as possible, invest early in the tax year and choosing investments that match your risk profile and goals.

Tips from Isa millionaires

This is Money has interviewed two Isa millionaires in the last year to hear of their blueprints for building an Isa worth £1million.

Lord Lee of Trafford, the UK’s first Isa millionaire and Ollie Price, who became an Isa millionaire at the age of 36 shared their tips and best advice for joining the £1million club.

1. Fully use your Isa allowance

The first step to becoming an Isa millionaire is maxing out your Isa every year.

This might be a struggle for most savers now that the Isa limit is £20,000, where it was raised to in 2017 from £15,240.

Figures from HMRC show that only 4 per cent of Isa savers max out their Isa. But those who are able to achieve this will be well on the road to becoming an Isa millionaire.

‘I’ve been investing since 1987’, said Lord Lee, ‘those who started early like me had an advantage.’

While Mr Perry says he used most of or all his full Isa allowance to invest every year for 11 years between 2013 and 2024.

2. Learn about investing and what you’re investing in

One thing Isa millionaires have in common is that they do their research and have conviction in the stocks they choose to invest in.

Mr Perry’s strategy was to focus on individual stock picking in industries he understood, backed by research which he says allowed him to spot high-potential opportunities.

He says: ‘Before you even start to put £10 in an Isa do some research about investments.

‘There’s a lot of value in understanding how stocks have performed, what inflation is and how it erodes the value of money.

While Lord Lee is a veteran stockpicker.

> Read more: Investing for beginners

3. Reinvest dividends

When it comes to generating long-term investment returns, compounding – through the automatic reinvesting of dividends – can be a powerful tool.

By reinvesting dividends, you reinvest the cash you would have been paid out as a dividend to buy extra shares in the company rather than receiving the dividend as cash to your bank account.

And that has been one of Lord Lee’s key tactics.

4. Be brave for market-beating growth

It’s unlikely that Isa savers with pots amounting to over £1million have been investing in index trackers over the years. Instead, they had some serious successes on the way and gains were locked-in, from individual shares.

For example, Lord Lee invested in Cerillion, a telecoms company, when it was first listed on the stock exchange in 2016.

Its share price on 18 March 2016 on its first day of dealing was 98p while today, it has risen to 1,190p.

While Mr Perry invested in tech-disruptor gambling company Betfair at the start of his investing journey in 2013.