YOU can scrimp and save your way to your first million, but the stock market offers bigger returns in the long run, according to a leading Yorkshire analyst.
The latest Barclays Equity Gilt Study showed that £100 invested in shares in 1899, with dividends reinvested, would be worth £20,228 in real terms today.
Had it been invested in a cash savings account, the figure would have been just £274, the research concluded.
Martin Payne, divisional director of Brewin Dolphin in Leeds, said: “At Brewin Dolphin we have nine Isa millionaires among our clients. They have a combined value of £15.5m, with the highest individual combined Pep and Isa pot of £4.4m.
“An Isa is simply a wrapper in which investments such as cash, shares and stock market shares and funds can be held to avoid capital gains tax and to reduce income tax.
“If your dream is to build up a million-pound savings pot over the long-term, you really need to consider investing in the stock market. Although there is an increase in risk, it is well-documented that shares offer opportunity to generate bigger returns over time.
“It might seem like a hard slog but salting your money away in a tax-efficient manner can pay dividends – in more ways than one.”