Junior ISA guide

Introduced in 2011, Junior ISAs (JISAS) are savings accounts available to any child not eligible for a Child Trust Fund. 

You can set up a Junior ISA on behalf of your child and they will have access to it once they turn 18.

With a Junior ISA, all interest earned is tax-free. Meaning the money will grow just as quickly as your little one.

To be eligible for a Junior ISA, your child should:

• Be aged under 18
• Live in the UK

There are many reasons you may be considering a Junior ISA over other savings alternatives:

• Easy and inexpensive to open
• A tax-efficient way to save
• Anyone can make payments into a Junior ISA
• The savings are locked until your child’s 18th birthday, so can’t be dipped into unnecessarily
• You can easily transfer your Junior ISA across from other Junior ISA providers

There are two types of Junior ISA:

Cash ISA

A Junior Cash ISA is very similar to a standard savings account, however you don’t have to pay UK Income Tax on the interest the money earns.

Stock and shares ISA

Junior investment ISAs have the potential to earn a high rate of returns, as the money is invested in the stock market. You also don’t have to pay UK Income Tax or Capital Gains Tax on any of the returns.

Your child can have one or both types of Junior ISA, however the money saved into both accounts will count towards the same Junior ISA allowance.

Anyone can make a payment into a Junior ISA, up to the yearly allowance. However, though money in the account belongs to your child, neither you or your child can withdraw from it until your child has turned 18.

Nonetheless, your little one can still manage their Junior ISA from the age of 16.

The Junior ISA allowance dictates that in the 2024/2025 tax year, you can save or invest up to £9,000 in a Junior ISA.

This money can be split between the two different types of Junior ISA or just the one, depending on your personal preference. For example, you may want to stow half of the money in a stocks and shares ISA and half in a cash ISA. 

Once your child turns 18, the account will automatically convert into a normal adult ISA and, as such, your child will be able to benefit from the full annual allowance for adults, which is £20,000 for the 2024/2025 tax year.

When it comes to a flexible stocks and shares ISA, it’s best to speak to your financial adviser to discuss what you might want to do next.

As a parent or legal guardian, you can open a Junior ISA on your child’s behalf.

If you’re interested in opening a Junior ISA, you must be a resident in the UK and have parental responsibility for that child.