What happens to a Junior ISA when your child turns 18

Every Junior ISA has a built-in finish line. Over 18 years, you might have paid in steadily, grandparents might have added birthday money, and it's been quietly growing. Then, on one birthday, the money becomes your child's.

That can feel a little daunting. Here's what actually happens, what your child can do next, and how to help them be ready for it.

The short version: at 16, your child can take over running the account. At 18, the Junior ISA becomes an adult ISA in their name, and the money is theirs to use as they choose. Nothing is lost, nothing is taxed, and nothing has to be done on the day.

At 16: control, but no withdrawals

From 16, your child can take control of the account. That means they can deal with the provider themselves and choose how it's invested. They still can't take money out.

Some families hand over at 16. Others carry on as before and use the two years to talk about it. Either way, it's a good point to show your child the account properly: what's gone in, what it's grown to, and what it's invested in.

At 18: it becomes an adult ISA

On their 18th birthday, the Junior ISA automatically becomes an adult ISA of the same type. A stocks and shares Junior ISA becomes a stocks and shares ISA, and a cash one becomes a cash ISA. Providers such as Fidelity, Vanguard and Hargreaves Lansdown all say this on their own pages. (Squids-In is independent, and we don't earn anything from any provider or fund we mention.)

What that means:

• The money stays invested (or in cash), as before
• It keeps its tax-free status: no tax on growth or withdrawals
• Your child can take out some or all of it, whenever they like
• They can keep paying in, now under the adult ISA allowance of £20,000 a year
• They'll usually need to set up their own login with the provider

What you'll lose: the ability to manage it. The money legally belongs to your child, and from 18 they decide what happens to it. Parents can't block a withdrawal.

A small bonus in the 18th year: HMRC's own worked example shows that in the tax year a child turns 18, the Junior ISA limit applies before their birthday and the adult limit after it. So in that one year, up to £9,000 could go in before the birthday and up to £20,000 after.

Your child's options at 18

There's no single right answer. It depends on the amount, what your child wants, and what's coming up in their life.

1. Leave it invested

The money carries on growing, tax-free, in an adult ISA. For a young adult with decades ahead, this can be a powerful start: money left alone at 18 could still be growing at 60.

2. Use some, keep some

Take out what's needed for something specific (driving lessons, a laptop for university, a gap year) and leave the rest invested.

3. Move it

They can transfer it to another provider, or from a cash ISA to a stocks and shares ISA or the other way round, without losing the tax-free status. As with any ISA transfer, the new provider should arrange it, rather than your child taking the money out and paying it back in.

4. Spend it

It's their money, and some young people will spend it. That's their right, even if it's hard to watch.

Things to know about the adult ISA rules

• Cash ISAs: from April 2027, people under 65 will be able to put up to £12,000 a year into cash ISAs, within the overall £20,000
• Lifetime ISA: from 18, young people can open one for a first home or later life. The government is consulting on replacing it with a new First Time Buyer ISA, so check the rules at the time

The conversation with your teenager

The worry most parents have isn't the rules. It's the thought of a large sum landing in the hands of an 18-year-old who has never had to manage money.

The best protection isn't control, because you won't have it. It's understanding. A young adult who knows how the money grew, and what it could still become, is far more likely to treat it with care.

Some things that help:

• Start the conversation early, at 13 or 14 rather than a month before their birthday
• Show them the real numbers: what went in, and what growth added
• Talk about time: money left invested at 18 has the longest runway it will ever have
• Ask what they'd like to do, before telling them what you'd do
• Agree a plan together, such as using some for a goal and leaving the rest invested
• Accept that it's their decision. A plan they helped make is more likely to stick

Our guide on how to talk to your kids about money has more ideas by age.

Why early money education matters here

The Junior ISA is often the first large sum a young person has ever been responsible for. If the first time they think about investing is the week they turn 18, it's a lot to take in.

Children who've learned the basics along the way (what compound growth is, why spreading money out matters, why markets fall and recover) tend to find the handover far less daunting. They've had years to get used to the ideas.

That's what we built Squids-In for. Children aged 10 and up work through 130 short lessons at their own pace, and practise investing with pretend money in a game. When the real account becomes theirs, it isn't a stranger. Our guide to age-appropriate investing lessons covers what to teach at each stage, with or without an app.

Common questions

Q: Does my child need to do anything on their 18th birthday?

A: No. The account changes over automatically. The provider will usually get in touch about setting up their own login.

Q: Is there tax to pay at 18?

A: No. Money in an ISA is free of UK income tax and capital gains tax, and that doesn't change when it becomes an adult ISA.

Q: Can I keep paying into it after 18?

A: Anyone can give money to your child, and your child can pay it into their own ISA. But it's now their account, so it's their choice.

Q: What about a Junior SIPP?

A: That's different. A Junior SIPP becomes an ordinary pension in your child's name at 18, but the money stays locked until pension age. See Junior ISA vs Junior SIPP.

Q: My child has a Child Trust Fund, not a Junior ISA. Is it the same?

A: Very similar: control at 16, the money is theirs at 18. See our guide to finding a Child Trust Fund and what happens at 18.

Key points

• At 16, your child can take over running the account, but can't take money out
• At 18, it automatically becomes an adult ISA in their name, still tax-free
• The money is theirs: parents can't stop withdrawals
• Their choices: leave it, use some, move it, or spend it
• The best preparation is understanding, built up over years, not a talk on their birthday

Next steps

1. Check the account balance and what it's invested in
2. Start the conversation well before 18
3. Try some numbers together in our Junior ISA calculator, including what could happen if the money stays invested
4. Agree a plan, and then let them lead

Related guides:

• What is a Junior ISA?
• How to talk to your kids about money
• Age-appropriate investing lessons
• Teaching kids about compound interest

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