A Junior ISA lets family and friends put up to £9,000 a year into a tax-free account in your child's name. There's no government top-up — but no income tax, dividend tax or capital gains tax on anything it earns, ever. At 18 it becomes an adult ISA and the money is theirs to use.
Three things make Junior ISAs the default home for a child's savings
Money a parent gives a child normally triggers the "£100 rule": if it earns more than £100 of interest a year, the whole lot is taxed as the parent's income. Junior ISA income sits outside that rule — it's tax-free however much it earns.
No income, dividend or capital gains taxA parent or guardian opens and runs the account, but anyone — grandparents, godparents — can pay in. Nothing can be withdrawn before 18. Your child can take over managing it at 16, and at 18 it becomes their own adult ISA, still tax-free.
Funds university, a deposit or a head startA child can hold a cash Junior ISA, a stocks & shares Junior ISA, or both, within one £9,000 limit. Money can be moved between them, so you can shift from investments towards cash as their 18th birthday approaches.
One £9,000 limit across both typesAdjust the sliders to model your child's Junior ISA at 18 — and beyond
Two very different jobs — many families use both
| Junior ISA | Junior SIPP | |
|---|---|---|
| Annual limit | £9,000 | £2,880 paid in (£3,600 with relief) |
| Government top-up | None | 20% tax relief |
| Tax on growth | None | None while invested |
| Child can access | At 18 | At 57 (from April 2028) |
| Tax on withdrawal | None | 25% tax-free, rest taxed as income |
| Best for | University, a first home, early adulthood | Retirement — the longest compounding runway |
Anyone can pay into a Junior ISA — and for grandparents it can do two jobs at once
Grandparents can pay straight into a grandchild's Junior ISA, within the child's £9,000 yearly limit. Money left in a will only arrives after you've gone. Money given now gets years to compound — and you get to follow it, and perhaps see it put to use at 18 for university, a first car or a deposit.
The parent or guardian runs the account; you simply pay in. A regular standing order, or a lump sum on birthdays, both work.
Inheritance tax rules are complex and depend on your whole estate — take advice before relying on gifts for estate planning. The money belongs to the grandchild once given and can't be taken back.
Parents who want to save for a child without the £100 rule pulling the interest into their own tax return. Grandparents and godparents who'd rather give something that grows than another toy — anyone can pay in. Families who want the money available at 18 for university, a deposit or a gap year, rather than locked away until retirement.
Starting from birth gives a stocks & shares Junior ISA up to 18 years to ride out market falls — a long enough horizon that investments have historically outpaced cash, though with no guarantee.
The closer the money is needed, the less time there is to recover from a fall. Many families move gradually towards cash in the last few years before 18, so a market dip doesn't land just as university or a first home comes up.
At 18 the money legally belongs to your child and they can spend it however they like — you can't attach conditions. Nothing can be taken out before then, except if the child is terminally ill or dies. A child can't have a Junior ISA and a Child Trust Fund at the same time, but a CTF can be transferred into a Junior ISA. Unused allowance doesn't roll over to the next tax year, and limits and tax rules can change.