Barclays issues warning to anyone who has under £20,000 savings to their name
Barclays has issued a major update over how to become an ISA millionaire. The highly coveted status of being an ISA millionaire belongs to just a few thousand people in the UK, the high street banking giant has warned.
In a guide online, the bank - which is rivalled by the likes of HSBC UK, Santander, Lloyds, NatWest, Nationwide and more - said: "To get to £1 million, the first step is to invest the maximum each year. The most you can invest in an ISA in any given tax year is £20,000.
"So, if you started investing your full ISA allowance today and the ISA limit remained at £20,000, it would take you 25 years to become an ISA millionaire, assuming an average annual return of 5%. A lot of people won’t have this amount of money or time, but investing what you can into your ISA is a good habit to have."
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It urged customers to think about their investments wisely, adding: "The smart choice for any long-term investor is to have a well-diversified portfolio. The classical argument for a diversified portfolio is that it enjoys reduced volatility because when one of your investments isn’t performing so well, another will hopefully be performing strongly.
"By spreading your money across a range of investments, giving you exposure to different geographical regions, industries and asset classes – such as shares and bonds – you can spread your money far and wide." Customers should i nvest as soon as the tax year begins and make sure they are r egularly investing.
It's crucial to leave your money untouched, too. The bank advised: "N ot everyone is in the fortunate position to be able to invest the full £20,000 ISA allowance each year – but it doesn’t hurt to have an aspirational goal. Indeed, investment goals are an important driver for reaching targets.
"Having a goal can help motivate you to keep investing regularly and to focus on the long term."