Almost all of the ISAs with a market value of at least £1 million are stocks and shares accounts, according to new figures obtained from HMRC.

A response to a Freedom of Information (FoI) request submitted by Murphy Wealth found that of the 4,850 individuals with £1 million or more in their ISAs during the 2021/22 tax year – the latest available data – 4,560 (94%) had stocks and shares accounts.

The remaining 290 individuals holding ISAs with a market value of at least £1 million had a combination of cash and stocks and shares ISAs which reached or exceeded that value together.

The data is revealed amid reports that the Chancellor is reviving plans to reform Cash ISAs, including a cut to the tax-free allowance to encourage savers to invest in the stock market.

HMRC released data showing that in 2023/24 tax year the number of cash ISAs has risen to 9.94 million – up 2.1 million on the previous 12 months. Meanwhile, the number of stocks and shares accounts only increased by 283,000 to 4.09 million.

Despite stocks and shares now having only a 27% share of all ISAs, they represent 59% of the total market value of accounts, at £511 billion compared to £360 billion for cash. That means the average value of stocks and shares accounts was nearly four times greater than cash ISAs – £124,939 compared to £33,217.

Adrian Murphy, CEO of Murphy Wealth, said: “While unsurprising, these figures from HMRC are revealing. Almost all ISA millionaires have built their wealth by holding stocks and shares – and no one has got to that status holding cash alone. It only serves to underline why more people in the UK should consider investing their money.

“There is a popular perception that the stock market is too risky and holding cash is the safe option. But the reality is quite different. Historically, a balanced portfolio of stocks and shares has delivered far higher returns over most reasonable timeframes, while cash savings have often failed to beat inflation.

“Even during periods like the last couple of years when interest rates on cash ISAs have been optically high, many of them default to a lower rate after a year or two. And, given how stubborn inflation has proven, an increasing number of cash accounts are failing to keep up with the rising cost of living.”