ISA Millionaires Hit a Record: What It Means for Your Tax Return

Tax Queen

Tax Expert @ Pie

3 min read

What You Need to Know

The record rise in ISA millionaires doesn't change how you file Self Assessment. It does show how much tax an ISA can protect on savings you hold outside your business.

Interest and dividends earned inside an ISA don't go on your tax return, but money held elsewhere might. Before you file for 2025-26, check where your savings are kept and how the Personal Savings Allowance and tax-free interest rules apply to you.

What the New Figures Show

HMRC data released under a Freedom of Information request shows that 7,730 people held ISAs worth £1 million or more on 5 April 2024, up from 5,070 a year earlier. That's a rise of about 52%, the biggest yearly jump since the figures were first released in 2016. [Editor Note: Unverified figure - check against HMRC guidance]

The average ISA millionaire holds about £1,348,000. HMRC has previously said these pots were built in stocks and shares ISAs, not cash.

Why ISAs Matter for Your Tax Return

An ISA (Individual Savings Account) is a tax-free wrapper, so anything you earn on the money inside it isn't taxed. In the 2026-27 tax year you can pay in up to £20,000 across all your ISAs.

Outside an ISA, your Personal Savings Allowance (the interest you can earn before paying tax) is £1,000 for basic rate taxpayers, £500 for higher rate and £0 for additional rate.

Dividends above the £500 dividend allowance are taxed at 10.75%, 35.75% or 39.35% in 2026-27, depending on your tax band. Profits from selling shares outside an ISA are covered by a £3,000 Capital Gains Tax allowance, which is the profit you can make tax-free each year.

If your interest or dividends go over these allowances, you report them alongside your business profits. Our guide on how to file your UK tax return walks you through it.

The Cash ISA Change Due in April 2027

The source reports that from April 2027, the cash ISA allowance will fall from £20,000 to £12,000 for savers under 65, while the overall limit stays at £20,000. [Editor Note: Unverified figure - check against HMRC guidance] If your tax savings sit in a cash ISA, you may be able to shelter less after that date.

Getting Your Savings and Business Records in Order

Many self-employed people set money aside for their tax bill in a savings account. If it isn't an ISA, the interest counts as taxable income and could push part of your income into a higher band.

Keep your bank's yearly interest statement with your business records. Then the right figure is ready when you report it next to your trading profit.

When savings interest and dividends have to sit alongside your trading income, Pie Tax can help. It's self-assessment software for sole traders, freelancers and landlords that pulls in your income and sorts your allowable expenses, so your whole return is in one place.

Once you know which accounts are taxable, you can bring everything into one return before the deadline. If that sounds useful, Try Pie Tax for free.