Since its launch in 1999, the Individual Savings Account (ISA) has been a popular choice for many savers – offering tax free benefits .

As ISA popularity has grown, so has the total annual allowance from £7,000 in 1999 to £20,000 today. This explosion in the amount we can save each year means that within as little as a decade we could all be millionaires. The new £20,000 allowance means a couple can stash away £40,000 annually,  propelling them high up the league of the super-rich, without a lottery win or hitting the premium bond jackpot.

And as a nation it’s our insatiable appetite for the life of luxury that really attracts us to joining the millionaire’s club – something that is perfectly possible today if you save smart and take advantage of the government’s tax free gift.

There are some existing ISA millionaires, but these are rarer. Previous ISA allowances, launched at £7,000 in 1999, were too low to make it into the big time for most savers. If you invested the maximum possible since the beginning you could only have subscribed £169,560 over the past 18 years. Pushing that to £1m would have required some sizeable investment returns over the period.

By regularly saving over many years, and the compounding of those returns savvy savers will reap huge rewards. Although it is clear individuals are not maximising the tax benefits available to them. Even wealthier savers, with investments to protect from high rates of income tax, fail to exploit this precious tax break to the full. The latest HM Revenue & Customs research shows only two-thirds of those earning more than £150,000 a year fill their Isa allowance each year.

If an individual invests £20,000 before next April’s tax year deadline, and then the full allowance each year thereafter, an individual will take 20 years to exceed £1m at a 6% annual growth rate – or rather £1,075,140. The higher the growth rate the quicker you will reach the millionaires club. This is based on the ISA allowance increasing 2% yearly to allow for inflation. If a couple both maximise their investing opportunity, then they reach £1m in half the time, or in roughly a decade

Do you want to become a member of the ISA millionaires club – speak to our team today about investing in an fully-managed ISA: 0207 416 6806.