What is a Junior ISA?
A Junior ISA, or JISA, is 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. It’s a way to build a nest egg for your child’s future. And the earlier you start saving, the more time the money has to grow.
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.
Unfortunately, you can’t currently compare Junior ISAs at Compare the Market.
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 2025/26, 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.
How much could you help your child save?
There’s no way of putting an exact figure on how much you could save, due to the unpredictability of ISA limits and rates. However, the table below gives you some idea of how your child’s money could grow if you started saving from birth, at an assumed interest rate of 3%[1].
Amount saved each month | Total savings pot at 18 |
|---|---|
£50 | £14,297 |
£100 | £28,594 |
£200 | £57,188 |
£500 | £142,970 |
£750 | £214,455 |
[1]Calculations assume that the rate remains constant and that interest compounds monthly. In reality, Junior cash ISA interest rates are usually variable so are likely to fluctuate.
Did you know?
Around £1.5 billion was paid into Junior ISAs in 2021-22, of which 42% was in cash, according to the latest government figures. The average paid into each account across the year was £1,229.
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 ISA
This grows by earning interest in the same way as a regular savings account. Neither you nor your child will have to pay tax on the interest earned.
Junior stocks and shares ISA
This invests money in the stock market through funds, bonds and individual shares. There’s no tax to pay on any profits or dividends.
Although investments in stocks and shares 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.
How many Junior ISAs can my child have?
Unlike standard ISAs, where you can open and pay into multiple ISAs of the same type in each tax year, your child can only have one Junior cash ISA and one Junior stocks and shares ISA.
The total paid in across the two accounts must not be more than the limit for the tax year.
What are the advantages of Junior ISAs?
The growth in savings or investments is tax free
Any adult can make contributions
Growth is long term as the money can’t be accessed before the child is 18.
What are the disadvantages of Junior ISAs?
There’s a limit to how much you can save in each tax year (currently £9,000)
The value of a stocks and shares JISA could fall
The money is locked away until your child turns 18
Once your child is an adult, they can do whatever they want with the money
Can you transfer a Junior ISA?
Yes, if you want to get a better interest rate, you can switch a 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.
Never withdraw the money yourself if you’re transferring an ISA. Get your new provider to handle the transfer process to make sure the ISA doesn’t lose its tax-free benefits.
How to choose the best Junior ISA for your child
When deciding which Junior ISA is right for your child, you’ll need to think about:
How much you can pay in
With some stocks and shares Junior ISAs, there may be a minimum lump sum investment, or you may need to make regular contributions of £25 or £50 a month. Most cash ISAs can be opened with as little as £1.
Interest rates
Try to get the best rate of interest you can with a cash ISA. Compare this against rates for standard children’s savings accounts.
Your attitude to risk
If you’re not comfortable taking any risks with your money, you’re likely to feel safer with a cash Junior ISA. While investment Junior ISAs tend to outperform cash over time, there’s always a chance your child could be left with less than you put in.
Fees you’ll need to pay
Stocks and shares Junior ISAs often come with annual fees and dealing charges, although you can get ones that don’t. Make sure you’re clear about what these are before you sign up to an investment ISA.
How do I open a Junior ISA?
You’ll need to apply directly with the account provider, which could be a bank, building society, credit union, stockbroker or other financial institution. Some JISA accounts can be opened online, but others must be opened and managed by post or in-branch.
If you’re aged 16 or 17, you can open a Junior cash ISA yourself.
Unfortunately, you can’t currently compare Junior ISAs at Compare the Market.
FAQs
Who can add money to a Junior ISA?
Anyone can contribute to a JISA. 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 to a Junior ISA 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 child can carry on saving for the future or spend the money how they like. Or they could put some of the money into a Lifetime ISA, which can help them save for their first home.
The important thing to remember about a Junior ISA is that you don’t have any control over what your child does with the money you’ve saved for them.
Should I save or invest into a Junior ISA?
Whether it’s better to save or invest depends on your attitude to risk and how old your child is. 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 an investment ISA there are no guarantees that the value of your child’s savings will go up. Your child could get less than you put into the ISA.
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. Children’s savings accounts, which allow your child to make withdrawals before they reach 18, can get them used to managing money when they’re young. They might also pay a higher rate of interest than Junior ISAs.
Savings from children’s accounts isn’t usually subject to tax, unless they earn more than £100 in interest a year from money given by a parent. In that case, the parent will have to pay tax on the interest if it takes them over their own personal savings allowance. That’s £1,000 a year for a basic rate taxpayer.
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.
Compare the Market doesn’t currently compare Junior ISAs or children’s bank accounts. If you have older children or you’re looking to maximise your own savings, we do compare cash ISAs for those aged 18 and over.
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