What is a Junior ISA? A plain-English guide for parents

If you'd like to put money aside for your child's future, a Junior ISA (Individual Savings Account) is one of the simplest and most useful places to do it in the UK. Here's how it works, in plain English.

What is a Junior ISA?

A Junior ISA is a tax-free savings or investment account for children under 18 who live in the UK. Parents, grandparents, other family and friends can all pay in, and everything it earns is free from UK income tax and capital gains tax.

The key features:

For children under 18
Up to £9,000 a year can go in (the 2026/27 limit)
Growth is tax-free
Your child can take charge of it at 16, and take money out from 18
Two types: cash and stocks and shares

Cash or stocks and shares?

A child can have one of each type, or just one. The £9,000 limit covers both together.

Cash Junior ISA

A cash Junior ISA works like a savings account:

It pays interest, and the rate moves up and down with interest rates generally
The amount you put in doesn't fall
It suits money you'll need within about five years
Over long periods, it has usually grown more slowly than investments

Stocks and shares Junior ISA

A stocks and shares Junior ISA invests the money, usually in funds that hold shares in many companies:

Over long periods, shares have historically grown faster than cash
The value goes up and down along the way, sometimes sharply, and can fall below what you put in
It suits money that can stay invested for 10 years or more
Nothing is guaranteed

Worth knowing: when the money won't be needed for 10 to 18 years, stocks and shares have historically done much better than cash over periods that long. That's why many parents choose a stocks and shares Junior ISA for a young child, often holding a low-cost index fund.

How much can go in?

For the 2026/27 tax year, the limit is £9,000 per child.

This means:

£9,000 in total, from everyone, per child per tax year (6 April to 5 April)
Any amount up to that is fine; many providers accept from £25 a month, and some less
Family and friends can pay in too, as long as the total stays within £9,000
Unused allowance doesn't carry over to the next year

You don't need to fill the allowance for a Junior ISA to be worthwhile. Small, regular amounts add up.

Why starting early helps

Here's an example. Say £100 a month goes into a stocks and shares Junior ISA from birth, and it grows by 6% a year (a careful figure for illustration; real returns go up and down and aren't guaranteed):

Put in over 18 years: £21,600
Could be worth at 18: about £38,000

That's around £16,700 of growth, all tax-free.

The same £100 a month in cash at 3% a year would be about £28,500 at 18. Cash rates change, so treat that as a rough comparison, not a forecast.

Time matters as much as the amount. At 6%, £50 a month from birth (£10,800 in total) could be worth about £19,100 at 18. £100 a month from age 10 (£9,600 in total) could be about £12,300. A similar total, but the earlier money has had twice as long to grow.

What happens at 16 and 18?

At 16, your child can take control of the account: they can choose how it's invested and speak to the provider themselves. They can't take money out yet.

At 18, the Junior ISA becomes an adult ISA in their name, and the money is theirs:

They can take it out, or leave it where it is
Money that stays in an ISA stays tax-free
As adults, they get the adult ISA allowance of £20,000 a year (from April 2027, no more than £12,000 of that can go into cash ISAs for people under 65)

That's why it helps to talk to your child about the money long before they turn 18.

How to open a Junior ISA

Choose a provider. Banks and building societies offer cash Junior ISAs; investment platforms offer stocks and shares ones.
Choose cash or stocks and shares (or both), thinking about how long the money can stay invested.
Apply online. Only a parent or legal guardian can open the account. You'll usually need your child's details, and their National Insurance number if they have one (children get one around 16).
Set up payments. Most providers let you pay by monthly direct debit.
Choose investments (for stocks and shares). Many parents pick a low-cost global index fund.

If your child has a Child Trust Fund, they can't also have a Junior ISA, but you can ask the new provider to move the Child Trust Fund into one.

Our step-by-step guide has more: how to open a Junior ISA.

Common mistakes to avoid

1. Choosing cash for money that won't be needed for years

Cash feels safer, and for short periods it is. Over 10 years or more, it has usually grown much less than a spread of shares.

2. Waiting to start

The earlier money goes in, the longer it has to grow. A small amount started early can do as much as a larger amount started later.

3. Paying too much in fees

Platform and fund charges come out every year, whatever happens to the value. Low-cost index funds often charge well under 0.3% a year.

4. Leaving your child out

As they get older, show them the balance and talk about how it's growing. It's one of the best money lessons you can give them, and it prepares them for the day it becomes theirs.

Junior ISA or Junior SIPP?

You may also hear about Junior SIPPs, which are pensions for children. The quick comparison:

Junior ISA:

Your child can use the money from 18
Up to £9,000 a year
No government top-up

Junior SIPP:

Locked away until retirement: 57 at the earliest under current rules, and likely later for today's children
Up to £2,880 a year paid in, which the government tops up to £3,600
The 25% top-up is tax relief

Some families use both: a Junior ISA for flexibility at 18 and a Junior SIPP for the very long term.

Read our guide to Junior SIPPs or compare the two side by side.

Next steps

See what regular amounts could become with our Junior ISA calculator
Compare providers on fees and the funds on offer
Open the account, which usually takes 10 to 15 minutes online
Set up a regular payment so it happens without you thinking about it
Involve your child as they grow up

Frequently asked questions

Can I take money out of a Junior ISA? No. The money belongs to your child and stays in until they turn 18. The only exceptions are if a child is terminally ill, or dies.

What if we move abroad? The Junior ISA stays open and keeps growing. HMRC's rules allow payments to continue, but not every provider accepts them, so check with yours. You can't open a new Junior ISA for a child who doesn't live in the UK.

Can my child have more than one Junior ISA? They can have one cash and one stocks and shares Junior ISA at the same time. The £9,000 limit covers both together. You can move a Junior ISA to a different provider at any time.

What if too much goes in? Providers normally turn away payments over the limit for their own account. If the total across two accounts goes over, contact the providers and they'll help put it right.

Conclusion

A Junior ISA is one of the simplest ways to put money aside for your child: tax-free growth, a generous allowance, and up to 18 years of time working for it.

The things that matter most are starting early, choosing the type that fits how long the money can stay put, and keeping going. Small amounts add up.

To see what a regular amount could grow to, try our Junior ISA calculator.

This article is for education only and isn't financial advice. Tax rules can change, and the value of investments can go down as well as up.

What is a Junior ISA? A plain-English guide for parents