Junior ISA Projector

Junior ISA: the best head start you can give

A Junior ISA (JISA) is a tax-free savings and investment account for children under 18. All growth, dividends and interest inside the JISA are completely free of tax. The money is locked until your child turns 18, at which point it automatically converts to an adult ISA — your child then controls what happens to it.

The two types of Junior ISA

Stocks & Shares JISA: Invested in the stock market. Over an 18-year horizon, historic global equity returns have significantly outpaced inflation and cash savings rates. The long lock-in actually works in your favour here — your child can't withdraw in a crash, so the portfolio has time to recover.

Cash Junior ISA: Earns interest like a savings account, FSCS-protected up to £85,000. Safe, predictable, but unlikely to keep pace with inflation over 18 years. More appropriate if your child is close to 18 and you want to de-risk.

The annual allowance

The JISA annual allowance for 2025/26 is £9,000 — that's £750/month. Parents, grandparents, family and friends can all contribute, but the total across all contributors cannot exceed £9,000 in any one tax year. Unlike adult ISAs, you can only hold one type of JISA (S&S or cash) with one provider at a time, though you can transfer between providers and switch from cash to S&S (or vice versa).

Who can open a JISA?

A parent or guardian must open the JISA, but anyone can contribute to it once it's open. Your child cannot access or manage the money until age 18. If your child already has a Child Trust Fund (CTF) — the government scheme that ran from 2002–2011 — you must transfer it to a JISA before opening a new one.

Why the 18-year lock-in is actually good

It's tempting to see the lock-in as a restriction. In practice, it's one of the JISA's biggest advantages. Adults investing for themselves can panic-sell in a crash, crystallising losses. Your child can't — the JISA just sits there, reinvesting dividends, riding out volatility. An 18-year horizon comfortably spans multiple market cycles. Every crash in the past century has eventually recovered and gone on to new highs.

What your child gets at 18

At 18, the JISA becomes a standard adult ISA in your child's name. They can withdraw it all, keep it invested, transfer to another provider, or continue contributing within the adult ISA allowance (currently £20,000/year). The money is fully theirs — which is both the point and worth a conversation with them about what it's for.

The power of starting early

A child born today, whose parents put £200/month into a Stocks & Shares JISA at 7% returns, would have roughly £85,000 at 18 (nominal) — on total contributions of £43,200. Start the same amount at age 5 and you'd accumulate around £51,000 — the same monthly outlay, but 5 fewer years of compound growth costs you £34,000. The first few years of a child's life are by far the most valuable compounding years they'll ever have.