Becoming an ISA millionaire might not be as difficult as you first think. If you had invested the maximum allowance since April 2000, when ISAs were first introduced, your portfolio could now be worth a massive £5.06m if you had invested in the best performing funds. All free of income and capital gains tax.

Of course, the chances of picking the best-performing funds each year are slim. For example, not many would have predicted that Black Rock Gold and General would be the top-performing Isa fund in 2001-02 with a spectacular return of 90% Especially as the Treasury was in the midst of selling off half the country’s gold reserves.

However, advisers say that you can improve your chances of becoming an Isa millionaire by avoiding fund fads, making sure you have a balanced long-term portfolio across a range of sectors and then adding risk to improve your returns.

Most Isa millionaires are people who have diversified into higher-risk areas, such as emerging markets – though that may not be the right approach in the future. Brewin Dolphin , the fund manager, said it had nine Isa accounts valued at more than £1m, with the largest worth £4.3m

Even if you do not have a crystal ball and are not lucky enough to pick the best performers of the future, you could be an Isa millionaire by the time you retire if you save regularly. According to research by Fidelity, an investor aged 30 in 1999 who saved the maximum into an Isa every year for the next 35 years (to 2034) could have an Isa portfolio worth just over £1m at the age of 65. This assumes the annual allowances rises in line with inflation at 2.5% each year and the underlying investments grow by 5%.

These figures show what a substantial pot you can potentially build through taking regular advantage of your Isa allowance. If you can accept the higher risk compared to cash savings, the returns from the stock market investments could be considerable.

Contact us today if you would like to discuss Isa’s with an adviser.