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Junior and children’s ISAs

A Junior ISA is a great tax-free way to build up money for your children as they launch themselves into the world at 18. See their advantages and why they make a great addition to having a child savings account.

A Junior ISA is a great tax-free way to build up money for your children as they launch themselves into the world at 18. See their advantages and why they make a great addition to having a child savings account.

Written by
Sajni Shah
Consumer expert on money and utilities
Last Updated
24 JANUARY 2024
4 min read
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What is a Junior ISA? 

A Junior ISA is a way to give your child a nice nest egg to spend or save when they reach 18.

It’s a type of tax-free savings or investment account that you can open in your child’s name and save into on their behalf.

Any cash in the account belongs to the child. But they’re not allowed to take money out of it until they turn 18, except in exceptional circumstances.

You can’t have a Junior ISA as well as a Child Trust Fund (CTF). Anyone with money in a CTF can transfer it to a Junior ISA.

How does a Junior ISA work? 

Any child under the age of 18 who lives in the UK can have a Junior ISA. The account can be opened by the child’s parent or legal guardian.

Once they turn 16, your child can start to manage their account themselves, but they can't get their hands on the money for another two years.

There’s a limit to how much you can pay into a Junior ISA each year. For the tax year 2024/25, the allowance is £9,000. Interest or investment gains aren’t taxed, so even if you can only afford to put away a small amount each month, you can create a sizeable nest egg for your child by the time they turn 18.

What types of Junior ISA are available? 

There are two types of Junior ISA – a Junior cash ISA and a Junior stocks and shares ISA. 

  • Junior cash ISAs earn interest in the same way as regular savings accounts. Interest rates tend to be higher on children’s ISAs than adult ones. Neither you nor your child will have to pay tax on the interest earned.
  • Junior stocks and shares ISAs invest money in the stock market through funds, bonds and individual shares. There’s no tax to pay on any profits or dividends. Although investments are riskier than cash savings, shares typically do better than cash savings over the long term. This means they can potentially add up to more for your child. Always remember, though, that the value of investments can go down as well as up.

You can save into one or both types of Junior ISA for your child, but the total paid in mustn’t be more than the limit set by the Government for the tax year.

Can you transfer a Junior ISA? 

Yes, if you want to get a better interest rate, you can switch the Junior ISA to another provider whenever you like. You can also switch between the two types of Junior ISA. A child can only have one Junior cash ISA and one Junior stocks and shares ISA at any one time though.

Get your new provider to handle the transfer process to make sure the ISA doesn’t lose its tax-free benefits.

If you already pay into a Child Trust Fund, you can transfer it to a Junior ISA if you want to.

Frequently asked questions

Who can add money to a Junior ISA?

Only parents or legal guardians can open a Junior ISA, but anyone can contribute. That means grandparents, other family members or even friends can all add to the pot, as long as the total amount paid in stays under the annual limit.

What happens when my child turns 18?

Once your son or daughter turns 18, the Junior ISA account is automatically rolled over into a standard adult ISA. Your daughter or son can carry on saving for the future or spend the money how they like – buying a new car perhaps, or using it for uni costs or for going travelling. Or they could put some of the money into a Lifetime ISA, which can help them save for their first home. But the important thing to remember about a Junior ISA is that you don’t have any control over what they do with the money you’ve saved for them.

Should I save or invest?

This really depends on how old your child is and your attitude to risk. Investments typically do better than cash savings over the long term, so they can be a good option if you start when your child is young. But with the stock market there are no guarantees that the value of your child’s savings will go up. If your child is close to their 18th birthday, a Junior cash ISA could be safer.

Should I open a children’s savings account instead?

Junior ISAs aren’t suitable for everyone. Some parents want more control over how their children’s money is spent, while the personal tax allowance means Junior ISAs no longer have a tax advantage for most savers.

Regular children’s savings accounts allow your child to make withdrawals before they reach 18 and can get them used to managing money when they’re young. They might pay a higher rate of interest than with Junior ISAs, but it’s always worth comparing to see which will pay most.

And, of course, while you can only pay into one Junior ISA scheme a year, there’s nothing to stop you from having both a JISA and a savings account for your child. You and your child could use the savings account for short term, accessible savings, and the JISA for long-term savings, for example.

How do you find the best Junior ISA rate?

To make sure your money is working hard for your child, it’s worth regularly comparing Junior cash ISA rates. Comparethemarket doesn’t currently offer comparisons for kids’ bank accounts including Junior ISAs, but we do compare cash ISAs for those aged 16 and over.

What do I need to compare Junior ISA rates? 

At Compare the Market, we don’t offer child cash ISA comparisons specifically. But we do compare cash ISAs that can be opened from the age of 16. You don’t need anything to compare ISA rates, but you will need some basic personal details if you decide to apply, including: 

  • your National Insurance number
  • your address
  • your occupation
  • any current ISA account details you want to switch into a new ISA

Why use Compare the Market?

We compare savings accounts and cash ISAs from leading providers Rated 4.8/5 on Trustpilot[1]


[1] As of July 1st 2024, Compare the Market had an average rating of 4.8 out of 5 from 43,115 people who left a review on Trustpilot. The score 4.8 corresponds to the Star Label ‘Excellent’.

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Sajni Shah - Consumer expert on utilities and money

Sajni is passionate about building products, allowing Compare the Market to help you make great financial decisions. She keeps track of the latest trends and evolving markets to find new ways to help you save money.

Learn more about Sajni