Who wants to be an Isa millionaire?

Investing in Isas isn’t normally a strategy that savers equate with vast wealth or stunning returns. However, the wealth manager Brewin Dolphin reckons equity-linked Isa pots can create millionaires in just 27 years.

 

Brewin, which says it already has 15 millionaires with significant Isa investments on its client list, has done the sums on investing the maximum amount a year in an Isa tied to the FTSE.

 

Assuming inflation of 2.5 per cent and growth plus income of five per cent, Brewin believes an investor can break the million barrier in 2042, having put in £508,773, gained £522,180 and meanwhile saved £292,215 in taxes.

 

“The importance of compounding, and the benefits of tax efficient saving, can deliver life-changing wealth to those who seize the opportunity,” said Guy Foster, head of portfolio strategy.

 

Individual Savings Accounts were introduced in 1999, followed by a stocks and shares version in 2003. The maximum investment amount in the next financial year is £11,880, of which up to £5,940 can go into a cash Isa.