ISA Millionaires

ffacoffipawb

ValiantSon wrote: »

Ooops! Yes, I managed to multiply too many times.

I'll change the figures in the original post.

You have now changed the TESSA to £9,000.

This probably understates because when the first TESSA matured you could roll it into a new TESSA. If you started in 1991 you could start a new one in 1996 so the TESSA element is probably £18,000 half from the original TESSA and the rest from the second TESSA. New TESSA accounts were unavailable from 1999 I think.

ValiantSon

ffacoffipawb wrote: »

You have now changed the TESSA to £9,000.

This probably understates because when the first TESSA matured you could roll it into a new TESSA. If you started in 1991 you could start a new one in 1996 so the TESSA element is probably £18,000 half from the original TESSA and the rest from the second TESSA. New TESSA accounts were unavailable from 1999 I think.

Yes, right again. I haven't even had a drink this evening!

But I'm going to have one now!

inflationbuster

Wonder how long it took them to get to £1 million?
A few decades?
What's the split in subscriptions and trading gains?

grey_gym_sock

ffacoffipawb wrote: »

You have now changed the TESSA to £9,000.

This probably understates because when the first TESSA matured you could roll it into a new TESSA. If you started in 1991 you could start a new one in 1996 so the TESSA element is probably £18,000 half from the original TESSA and the rest from the second TESSA. New TESSA accounts were unavailable from 1999 I think.

if you started a TESSA in 1991, and subscribed the maximum £9,000 over 5 years, then in 1996 you were able to roll the £9,000 original capital into a new TESSA. but you then weren't allowed to subscribe anything extra to the new TESSA over the next 5 years. so you never got past £9,000 capital, and £9,000 is the maximum that could eventually be rolled over into an ISA. (interest had to be withdrawn from the TESSA at the end of the 5-year term.)

ffacoffipawb

grey_gym_sock wrote: »

if you started a TESSA in 1991, and subscribed the maximum £9,000 over 5 years, then in 1996 you were able to roll the £9,000 original capital into a new TESSA. but you then weren't allowed to subscribe anything extra to the new TESSA over the next 5 years. so you never got past £9,000 capital, and £9,000 is the maximum that could eventually be rolled over into an ISA. (interest had to be withdrawn from the TESSA at the end of the 5-year term.)

Thanks. Knew the interest bit couldnt be carried over but couldnt recall the rest.

Had a great TESSA with Lambeth BS (whatever happened to them?). Started at 8% in year 1 and paid 13% or 15% (yes, really) in year 5.

jimjames

teddysmum wrote: »

I imagine that most millionaires take advice on better places, than ISAs, to put their funds.

What better place is there than an ISA to hold funds? SIPP you get tax relief but limited access and taxed on way out, what else?

inflationbuster wrote: »

Wonder how long it took them to get to £1 million?
A few decades?
What's the split in subscriptions and trading gains?

See above for max possible amounts that could be paid in. The rest is either growth (not necessarily from trading) and income. So out of £1m it's roughly £200k subscriptions and £800k growth/income but that's over a 30 year period so it's not a get rich quick scheme

lisyloo

jimjames wrote: »

What better place is there than an ISA to hold funds? SIPP you get tax relief but limited access and taxed on way out, what else?

I get employees NI 12% and employers NI 13.8% on my SIPP contributions in addition to income tax relief.

I won’t get taxed on 25% and PA each year.

No brainier for me below LTA.

I do have ISA as well for access but lesser amount.
No reason you can’t do both so you have the tax relief AND access.

Alexland

lisyloo wrote: »

I get employees NI 12% and employers NI 13.8% on my SIPP contributions in addition to income tax relief.

Wow you are fortunate to have an employer willing to share their NI saving with you!

Vortigern

jimjames wrote: »

What better place is there than an ISA to hold funds? SIPP you get tax relief but limited access and taxed on way out, what else?

VCTs, EISs, offshore tax havens, financing criminal enterprises?

NB I have no experience of any of these.

TheTracker

Re “avoid funds”.

I remember when the first ISA millionaire articles came about. IIRC the “didn’t buy funds” phrase was a retrospective characteristic, not a piece of advice. Ie at that point in time £1M with max contributions was achievable only if you’d taken high enough risk for high returns (I forget the number but say 20% pa), which would have meant you needed to expose yourself to stocks or exotic funds. It wasn’t advice to avoid funds.

So other my recollection is fuzzy or it is sloppy journalism. Perhaps both