Starting a Stocks and Shares ISA in 2025 could make me a millionaire. Here’s the way!

Many people have a stocks and shares ISA. Not that many of them become millionaires from it (although some do).

Doing things right in 2025 and beyond could help me aim for a million. Here are two things I plan to do to help me on my way to that goal.

Increase donations

To give myself the best chance as I aim to get a million, I will try to increase my contributions.

Each tax year brings a new Ordinary Shares and Shares ISA allowance of £20k.

Please note that tax treatment depends on the individual circumstances of each client and may change in the future. The content of this article is provided for informational purposes only. It is not intended to be, and does not constitute, any form of tax advice. Students are responsible for conducting their own due diligence and obtaining professional advice before making any investment decisions.

But every investor is different. So, even if I don’t have £20k left to invest, I’ll still want to maximize my contributions by putting as much into my ISA as often as my financial circumstances allow.

I also want my money to work for me as hard as possible. That will involve trying to make the best investment decisions. But it’s also important to try and minimize the impact of fees, charges, and commissions along the way.

So, my approach is to take the time to review the different Stocks and Shares ISAs on the market and choose the one that looks best for my financial circumstances and goals.

One final way I increase my contributions is by reinvesting any gains I receive instead of taking them out of the ISA as cash.

Buy from smart companies to hold for a long time

If I invest £20k a year and compound the value of my Stocks and Shares ISA at 10% a year, I should reach my goal of a million pounds after 18 years.

Therefore, focusing on my ISA contributions in the coming year and sticking to that practice in the long term can be very beneficial.

As for the 10% goal, it may not sound too difficult (some FTSE 100 stocks are currently producing that amount or very close to it), but actually as a compounded annual return over 18 years I think it’s actually challenging. After all, there are good years in the market but there are also bad years.

Therefore, I would carefully focus on buying a diverse range of what I think are smart companies, where their share price is attractive.

Applying the theory

As an example of a role I have held that I hope can help me achieve this goal, I can point out Legal & General (LSE: LGEN).

The financial services market is huge and I expect it to stay that way. Because of the large amount of money involved, it can be very profitable.

That’s how it is at Legal & General. It has been consistently profitable in recent years. Its retirement-focused business model has also generated a lot of cash, supporting high profits. The yield currently stands at 8.8%. The company revealed this week that it may increase the money it spends on buying shares.

What will actually happen in the future remains to be seen. In 2025 and beyond I see a risk that market volatility may lead policyholders to cash out, hurting profits.

But as a long-term owner, I have no plans to sell my shares.