It’s been a tougher task than usual for Britons to make a decent return on their cash. Interest rates have remained way below the levels recorded before the 2008 financial crisis. As a consequence, the rates on offer from standard savings accounts have been pretty dreadful.
But thinking outside the box has enabled many individuals to rise above and make truly titanic returns. Investment in UK shares has proved to be a particularly lucrative path to wealth for many over the past decade. Data just released by HM Revenues and Customs (HMRC) reveals how profitable investing has become for ordinary folk.
2,000 ISA millionaires!
According to the taxman, there are currently 2,000 ISA millionaires in Britain today. That’s according to data released following Freedom of Information requests from InvestingReviews.co.uk. The average holding for these wealthy individuals sits at a mammoth £1,412,000 too, the data shows.
HMRC says that 80 of these ISA millionaires are sitting on a pot of between £2m and £2,999,000. A further 60 also have funds worth £3m or above, with the average pot in this group sitting at a whopping £6,199,000.
Total holdings among ISA millionaires now sits at a staggering £2.8bn, according to HMRC. And InvestingReviews says that all of these high rollers are likely to be Stocks and Shares ISA holders.
Making a million
I own a Stocks and Shares ISA. I consider it a great way to invest in UK shares because it allows me to invest up to £20,000 a year without having to pay a penny in tax.
Studies show that stocks usually provide returns well above those which standard saving products can. Indeed, UK share investors tend to enjoy an average compounded annual return of 8% over the long term. This sort of rate can help someone who aims to invest regularly like me with a big pot to retire on.
Let’s say I can afford to invest £475 a month in UK shares via my ISA. After 35 years, I may have joined the millionaire’s club with a mighty £1,017,720 sitting in my account (based on that annual rate of 8%).
UK shares I think could make me rich
It’s not guaranteed, of course, and investments can go down as well as up. Investing our cash in shares is riskier than placing it in something like a cash account. But, in my opinion, the potential rewards I can receive with a Stocks and Shares ISA outweigh the risks. Some of my holdings include FTSE 100 royalty Diageo, Prudential and Coca-Cola HBC, shares that have provided big returns to their shareholders for decades now.
I also have an option to buy lesser-known high-growth shares that could help turbocharge my returns. I have also loaded up on software development services provider Keywords Studios, for example, and veterinary services provider CVS Group. Both of these companies are listed on London’s Alternative Investment Market (AIM).
There are countless other UK shares out there that could help me make a fortune with my ISA. And expert guidance from The Motley Fool could help me achieve my quest of becoming an ISA millionaire.