How long does it take to become an ISA millionaire?

How-long-to-become-an-isa-millionaireHow long does it take to become an ISA millionaire? The answer is not straight forward and depends on a number of variables including your savings rate, investment returns, time horizon and what you invest in. In addition, it takes several qualities of a good investor such as the right knowledge, discipline, patience, consistency, a good risk tolerance and persistence.

What is an ISA

An ISA (Individual Savings Account) is a method which allows residents of the UK to save or invest which provides tax favourable benefits. Money deposited into an ISA has already been taxed, for example  the take home pay you receive from an employer.


Any growth from investment capital gains, dividends or interest are totally tax free in an ISA. More importantly – all withdrawals from the account are completely tax free. There are no restrictions on when or how much you can take money from an ISA.


The main benefit of an ISA is that any growth from investment capital gains, dividends or interest are totally tax free. More importantly – all withdrawals from the account are completely tax free. Another positive is that there are no restrictions on when or how much you can take money from an ISA. As you can see an ISA can be used very flexibly which makes it very versatile for achieving investing goals.

There are many types of ISAs including the cash, innovative finance and investment ISA. For the purpose of this article I will only consider using an investment ISA as it is the only one which allows investing in the stock market. Investment ISAs have had a long history; they were introduced in 1999 as a continuation of previous similar schemes such as PEPs (Personal Equity Plan) which made available in 1989.

Getting to a Million

Currently, the maximum amount you can invest in the ISA is £20,000 within each financial year. This is a large amount and not many can use up the entire allowance so we will use a range of scenarios in this example. To indicate the enormity of the task – Investing the maximum £20,000 with a 0% growth rate, it would take around 50 years to accumulate a million. This is likely to happen if the money is kept in a regular cash savings account while not even accounting for inflation!

To have a chance of growing the portfolio to a million pounds it is critical to invest where you can get reasonably high returns. Here we consider a globally diversified portfolio of stocks and shares, assuming an annual return of 8% on yearly investments of £20,000. Using a compound interest calculator it would take 20 years which is a huge improvement over cash savings.


When building wealth, time is you best friend so the sooner you get started the better.


A more realistic savings amount of £10,000 a year would achieve a million in a period of 27 years. This is particularly fascinating in that investing only half of the £20,000 initially considered would arrive to the same goal just seven years later. It proves that when building wealth, time is you best friend so the sooner you get started the better. The following chart summarises the three scenarios.

Time taken to be an ISA millionaire

Time taken to be a millionaire using cash vs investment ISA

Having considered all this, it is important to note that it is not essential to be a millionaire to become financially independent. All you need is to ensure that passive income from your assets can cover your essential living expenses.

A million is just a nice round even mythical figure often associated with wealth but it may be more or less than what you actually require. Also note that due to inflation, a million in 10 or 20 years time will be worth less than it is today.

The new contribution £20,000 limit will certainly make it easier for more people to become ISA millionaires in future; the key is to invest regularly over a long period of time while minimising fees and expenses. Top investing strategies are outlined on this site and in my book which explore how to take advantage of these accounts.

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