Junior ISAs Explained: Start Your Child's Future Today

Starting to save for your child's future is one of the smartest financial moves you can make as a parent. Thanks to compound growth, even small regular contributions can grow into a substantial sum by the time your child reaches 18.

A Junior ISA (JISA) is the most tax-efficient way to do this in the UK. This guide covers everything you need to know: how JISAs work, which type to choose, how much to save, and what happens when your child turns 18.

What Is a Junior ISA?
Cash vs Stocks and Shares JISA
How Much Can You Save?
How to Open a Junior ISA
What Happens at 18?
Best Junior ISA Providers
FAQ
Next Steps

What Is a Junior ISA? {#what-is-jisa}

A Junior ISA is a long-term, tax-free savings account specifically for children. Here's how it works:

Key features:

Available for children under 18 living in the UK
Any growth, interest, or dividends are completely tax-free
Money is locked until the child turns 18
Only a parent or legal guardian can open the account
Anyone can contribute (grandparents, aunts, uncles, friends)

Who can open one:

A parent with parental responsibility
A legal guardian
A local authority (for looked-after children)

Who cannot open one:

The child themselves
Grandparents (but they can contribute once it's open)
Non-UK residents

The Two Types of Junior ISA

There are two types of Junior ISA, and you can have one of each:

Cash Junior ISA - Works like a savings account
Stocks and Shares Junior ISA - Invests in funds, shares, or bonds

You can split the annual allowance between both types, but the total across both cannot exceed the annual limit.

Cash vs Stocks and Shares JISA: Which Should You Choose? {#cash-vs-stocks}

This is the most important decision you'll make. Here's how they compare:

The Case for Cash JISAs

Choose a Cash JISA if:

Your child is close to turning 18 (less than 5 years away)
You're very risk-averse
You want simplicity
You're saving for a specific short-term goal

Current best rates: Cash JISA rates are around 4-5% as of early 2026. These rates change frequently, so shop around.

The Case for Stocks and Shares JISAs

Choose a Stocks and Shares JISA if:

Your child is young (10+ years until they turn 18)
You can accept short-term volatility for long-term growth
You want to maximise potential returns
You're comfortable choosing investment funds

Why stocks usually win over long periods:

Over any 18-year period in history, diversified stock market investments have outperformed cash savings. The longer the time horizon, the more likely stocks are to come out ahead.

Example comparison over 18 years:

Monthly contribution	Cash JISA (4%)	Stocks and Shares JISA (6%)
£50	£15,500	£19,200
£100	£31,000	£38,400
£200	£62,000	£76,800
£400	£124,000	£153,600

Illustrative figures assuming consistent returns. Actual returns will vary and stocks can lose value.

The Compromise: Start with Stocks, Switch to Cash

Many parents use this strategy:

Years 0-13: Stocks and Shares JISA (maximise growth)
Years 14-18: Gradually move to Cash JISA (protect gains)

This captures growth potential early while reducing risk as your child approaches 18.

How Much Can You Save? {#how-much}

The 2025/26 Junior ISA Limit

The annual Junior ISA allowance for the 2025/26 tax year is £9,000.

This limit applies across all Junior ISAs your child has. If they have both a Cash JISA and a Stocks and Shares JISA, the total contributions to both cannot exceed £9,000.

The allowance resets every tax year (6 April to 5 April).

How Much Should You Actually Save?

The right amount depends on your goals and budget. Here's what different contribution levels could grow to:

The Power of Grandparent Contributions

One advantage of Junior ISAs is that anyone can contribute. If four grandparents each gave £100 for birthdays and Christmas, that's £400 per year without you contributing anything.

Tip: Set up a Junior ISA and share the details with family members who want to contribute. Many prefer giving to a savings account rather than buying more toys.

How to Open a Junior ISA {#how-to-open}

Opening a Junior ISA is straightforward. Here's what you need to do:

Documents You'll Need

Your child's full name and date of birth
Your child's National Insurance number (if they have one) or birth certificate
Your identification documents
Proof of your relationship to the child
Bank account details for funding

What Happens When Your Child Turns 18? {#at-eighteen}

This is important to understand before you start: your child gets full control of the money at 18.

The Automatic Transfer

When your child turns 18:

The Junior ISA automatically converts to an adult ISA
Your child becomes the account holder
They can withdraw some or all of the money
The £9,000 becomes part of their adult ISA allowance

You cannot prevent this. There's no option to extend the lock period or maintain parental control.

Preparing Your Child

Given that your child will control potentially tens of thousands of pounds at 18, many parents:

Start financial education conversations early
Involve teenagers in discussions about the account
Explain the purpose of the money (university, house deposit, etc.)
Hope their child makes sensible choices

Important: If you're uncomfortable with your child having access at 18, a Junior ISA may not be the right choice. Alternatives include:

Saving in your own ISA and gifting later
Setting up a bare trust with different age access
Using a pension (accessible at 57+)

Best Junior ISA Providers {#providers}

Top Cash Junior ISA Providers (2026)

Rates change frequently, but these providers consistently offer competitive Cash JISA rates:

Provider	Features
NS&I	Government-backed, very secure
Coventry Building Society	Consistently competitive rates
Nationwide	Easy to manage alongside adult accounts
Yorkshire Building Society	Often highest rates

Always check current rates at comparison sites before opening an account.

Top Stocks and Shares Junior ISA Providers (2026)

For Stocks and Shares JISAs, consider:

Provider	Platform Fee	Best For
Vanguard	0.15%	Low-cost index funds
Fidelity	0.35%	Wide fund choice
Hargreaves Lansdown	0.45%	Research and tools
Interactive Investor	£4.99/month	Larger portfolios

What to look for:

Low platform fees (they compound over 18 years)
Good fund selection
Easy-to-use app or website
Ability to set up regular investments

Advanced Strategies

Maximising the Allowance

If you have spare cash, consider:

Lump sum at the start of tax year: Money has longer to grow
Gift allowance: You can give away £3,000 per year IHT-free
Birthday/Christmas coordination: Ask relatives to contribute

Child Trust Fund Transfers

If your child was born between 1 September 2002 and 2 January 2011, they may have a Child Trust Fund (CTF). You can transfer this to a Junior ISA, which typically:

Offers better interest rates or investment options
Has lower fees
Provides more provider choice

How to transfer: Contact your chosen Junior ISA provider. They'll handle the paperwork. The transfer usually takes 2-4 weeks.

Frequently Asked Questions {#frequently-asked-questions}

Key Takeaways

Start early: Time is your biggest advantage. Even small amounts grow significantly over 18 years.
Choose wisely: Stocks and Shares for long-term (10+ years), Cash for shorter periods or safety.
Anyone can contribute: Make it easy for family to add to the pot instead of buying gifts.
Fees matter: Low-cost providers save thousands over the account lifetime.
Prepare for 18: Your child will control the money. Start financial education early.

Next Steps {#next-steps}

Last updated: January 2026. This guide is for informational purposes only and does not constitute financial advice. Investment returns are not guaranteed and the value of investments can go down as well as up.

Junior ISAs Explained: Complete UK Guide (2026)