With ISA millionaires on the rise, we look at five key habits that support successful long-term investing.
The number of private investors with seven-figure ISA accounts is rising as the years go by.
Despite the fact that no more than £20,000 can be contributed to an ISA each year¹, a report using the latest HMRC data available shows a record high of 5,070 ISA millionaires on 5 April 2023, up from 4,850 at the end of the previous tax year. Eight years previously, in 2016, there were just 450².
Indeed, some of these investors have amassed more than £11 million since ISAs were introduced in 1999. Importantly, the vast majority have achieved millionaire status by concentrating their attention exclusively on stocks and shares ISAs rather than their cash-based counterparts.
Such findings beg the million-pound question of how other investors can join these hallowed ranks. Is it basically a matter of pure luck, or of a nose for a bargain, or of spotting a rare winner at an early stage and doubling down on it?
Well, the good news is that for most ISA millionaires, it’s none of these things. Here are five key considerations to help you on your way.
1) Start early
For most younger people, savings are about emergency funds, holidays or a deposit for a first home; talk of investing for the coming decades can feel fanciful. But if you can get into a long-term savings habit in those early years, no matter how modest, you lay firm foundations on which to build as money gets a little easier.
You might put away some of your annual bonus, birthday money, part of an inheritance, or a bit from your earnings each month. Assuming you don’t need access to the money in the short term, the key is to set up your stocks and shares ISA in the first place, and to invest the money you contribute rather than leaving it as cash.
Parents can get their children off to a strong start by setting up and paying into a Junior ISA that rolls over into a full adult account once the child turns 18.
2) Invest regularly, and maximise contributions where you can
As your income rises, it makes sense to set up a regular investing plan. These are offered by major investment platforms, and in some cases can work out as a cost-effective route into the markets.
Regular plans typically accept upwards of £25 a month; whatever sum you commit to, they’re a painless way to get into the habit of investing. Whenever you receive a pay rise, simply increase your contributions.
If you’re in the lucky position of having spare cash as the tax year end approaches (or at any other time), pay in a lump sum. Investing the full £20,000 each tax year¹ can transform the value of your investment.
3) Take sensible risk
If you want to be an ISA millionaire, you need to invest into a stocks and shares ISA account and select mainly funds or investment trusts focused on the equity markets.
An element of risk is of course involved, in that markets can go down as well as up in the short term, but risk-reducing diversification is provided by using funds in the first place, and then by combining those focused on different regions, investment styles and parts of the market.
To put that into some context, growth-oriented investments - technology or smaller companies funds, for instance – typically behave quite differently from less racy, more value-focused counterparts (which often pay generous dividends).
Similarly, funds investing in dynamic emerging markets, such as an Indian equities fund, are fishing in a very different pond and against a different macroeconomic backdrop from, say, a fund investing in the US equity market.
A balanced mix of investment focuses means that your portfolio always has some stronger performers helping to compensate for those currently hitting headwinds, thereby hoping to smooth volatility over the shorter term and aiming to provide a strong long-term basis for steady returns.
4) Reinvest dividends
If you opt to reinvest any dividends paid out by your holdings, that cash will go back into your account to buy more shares or units, which themselves subsequently generate dividends, and so on. This is known as compounding, and over the long term it can have a profound effect on the value of your portfolio.
Whilst past performance is not a guide to future returns, historical data from the Mercantile Investment Trust (MRC) shows that over 40 years, an MRC investor who reinvested their dividends would have built a portfolio worth three times as much as someone who took the cash instead³.
It’s worth noting that MRC is currently yielding around 2.9%⁴, so dividends, while valued, are not the primary focus of that investment team. Nonetheless, they are a key element of long-term performance.
5) Stay the course
A long view is central to successful investing for most ISA millionaires. That means not pulling out of volatile markets or chopping and changing funds just because they are not top of the performance table. It also means selecting investments run by highly regarded teams with a clear investment strategy and a long-term record that backs it up.
However, regular reviews of your portfolio are important, to ensure that investments have not gone seriously off the boil – or that if they have, you can understand why and see the managers are doing something about it. If you are uncertain, be sure to seek independent financial advice.
Why investment trusts work well for budding ISA millionaires
Investment trusts are all about the long term. As Annabel Brodie-Smith of the Association of Investment Companies explains: “Investment trusts’ long-term approach has delivered strong performance for investors over time. With their permanent capital structure, investment trusts can take a long-term view and are never forced sellers.”
The AIC found in 2025 that no less than 50 investment trusts would have made millionaires of investors who had channelled their full ISA allowance into those trusts every year since 1999⁵.
Among them, no less than nine of the J.P. Morgan investment trust range feature, including three among the top 10 most rewarding investment trusts since 19995.
However, the diversity of the AIC 50-strong list underscores how long-term success can involve a wide range of regions, market cap focuses, and investment approaches.
As Brodie-Smith emphasises: “It’s vital to spread your risk when investing. A diversified portfolio of investment trusts and other assets which meet your needs is the best way to succeed over the long term.” Nonethe less diversification does not eliminate the risk of loss.
