A Stocks and Shares ISA is a popular and flexible way to grow wealth tax-efficiently over time. All capital gains, dividends, and interest inside the wrapper are free from tax, which makes compounding much more powerful than in a standard savings account. 

Unlike a Cash ISA, account holders can direct thier allowance into global shares, funds, and investment trusts, choosing a mix that suits my goals rather than relying on a bank rate. That flexibility is where the long-term return potential really starts to show.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

From £20 a day

Let me start with a simple example. Just £20 a day equates to £7,300 a year going into an ISA – comfortably within the current £20,000 annual allowance. What could that add up to by around 2030?

AJ Bell’s analysis of global equity ISAs shows the average portfolio returned 141.8% over the 10 years to the end of 2023 – roughly 9.2% a year. Other data backs that estimate, sitting somewhere in the 8%-10% range, depending on region and style.

By assuming a 9% annual return and investing £7,300 each year, the pot could grow to roughly £36,388 by mid-2030, on total contributions of £29,200. That would mean a gain of just over £7,000 – around £1,750 per year.

By contrast, putting £7,300 into a competitive Cash ISA at around 4.5% would earn just £328.5 of interest in a single year.

The gap may look modest in year one, but over time it becomes much more meaningful. That is the real attraction of investing rather than just saving (albeit, with slightly more risk).

Why stock picking matters

Of course, aiming for 9% a year is not automatic. It needs sensible asset allocation and careful selection. 

For example, one of my core holdings, F&C Investment Trust (LSE:FCIT), is a growth-focused fund that’s been around since 1868. Here’s why I believe it deserves closer inspection.

The trust is diversified across listed global equities, unlisted securities, and private equity, with gearing used to enhance returns. That diversification helps spread concentration risk, but also leaves the trust exposed to market downturns and foreign currency fluctuations.

In its 2025 annual report, its total return for the year was 14.6%, versus 14.2% for the FTSE All-World index. It also demonstrated that over the past 10 years, £1,000 invested with dividends reinvested would have grown to £3,283.

The trust’s strict dividend growth commitment is the key attraction, in my opinion.

In 2025, it proposed a total dividend of 16.6p per share, a 6.4% rise, marking a 55th consecutive annual increase. That’s critical, because over time, reinvested dividends can make a huge difference.

The bottom line

The take away is simple: £20 a day can grow into something far larger than many people expect if it’s invested patiently and left to compound.

A more growth-focused portfolio could do better than average, but it would also carry more risk. In the end, it comes down to clever stock picking, sensible diversification, and staying the course.

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Mark Hartley owns shares in F&C Investment Trust.