A Junior ISA (JISA) is a long-term, tax-free savings or investment account for children, designed to help build a financial head start for adulthood.
With a JISA, parents, family, and friends can contribute up to £9,000 each tax year. The money grows free of income tax and capital gains tax, and the child gains full access at age 18.
Whether you choose a cash JISA for guaranteed growth or a stocks & shares JISA for higher long-term potential, these accounts are a powerful way to set your child up for future success.
All interest or investment growth is free from UK income tax and capital gains tax.
Helps build a savings pot for university, first home, or adult life.
Anyone can contribute, making it ideal for family gifts or regular deposits.
The child cannot access the money until they reach adulthood.
Contributions are capped per child per tax year.
Stocks & shares JISAs can fall in value if markets decline.
1. What is a Junior ISA?
A Junior ISA (JISA) is the UK's most tax-efficient way to save or invest for a child's future.
It allows parents, guardians, and others to build a financial nest egg for a child — free from income tax and capital gains tax.
Designed for children under 18, a JISA can hold up to £9,000 per tax year.
All interest, dividends, and capital growth are tax-free. Once the child turns 18, the account automatically
converts into an adult ISA, giving them full control of the funds.
JISAs can be held as either a cash account (with guaranteed interest) or a stocks & shares account
(with investment growth potential). This flexibility allows you to balance safety with the chance for higher long-term returns.
2. Tax benefits
Junior ISAs are among the most tax-efficient accounts available in the UK.
Every penny of interest, dividends, and investment growth earned inside a JISA is free from income tax and capital gains tax — both now and in the future.
This tax-free status means savings can compound faster, particularly over an 18-year period.
Even small, regular contributions can build into a sizeable, untaxed pot by the time the child reaches adulthood.
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No income tax on interest: - All interest earned in a cash JISA is tax-free, regardless of the amount.
There's no need to worry about exceeding the £1,000 Personal Savings Allowance.
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No capital gains tax (CGT): - Any profits from a stocks & shares JISA are CGT-free, even if investments grow significantly over 18 years.
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No dividend tax: - Dividends from shares or funds held in a JISA are completely tax-free, with no impact on your standard dividend allowance.
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No need for tax returns: - Parents and guardians don't need to report any JISA interest or gains to HMRC.
With an annual contribution limit of £9,000 per child, a JISA can shelter up to £162,000 in contributions over 18 years —
not including any investment growth, which also remains fully tax-free.
3. Cash vs stocks & shares JISAs
Junior ISAs come in two forms: cash and stocks & shares. Both offer tax-free growth, but they work very differently. The right choice depends on your risk tolerance, time horizon, and goals for your child's savings.
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Cash JISA: - Works like a traditional savings account, with a fixed or variable interest rate. Your child's money is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000 per provider, making it low risk. However, interest rates may not keep pace with inflation, which could erode the real value of savings over time.
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Stocks & Shares JISA: - Invests in funds, shares, or bonds, aiming for long-term growth. The value can go down as well as up, especially in the short term, but over 10-18 years, investments have historically outperformed cash. A stocks & shares JISA is better suited for families who can accept risk for potentially higher returns.
You're not limited to one or the other — you can split the £9,000 annual allowance between a cash JISA and a stocks & shares JISA in any ratio. For example, some parents keep part of the money safe in cash while investing the rest for growth.
- Time frame: - Stocks & shares JISAs suit savings of 5+ years, while cash JISAs are better for shorter periods or guaranteed outcomes.
- Risk tolerance: - If you prefer certainty, a cash JISA is safer. If you're comfortable with risk, a stocks & shares JISA offers more potential upside.
- Inflation: - Consider whether interest rates on cash JISAs will outpace inflation over 10-18 years.
OPTIMLY INSIGHT
Historically, investing in the stock market for 10+ years has delivered stronger returns than cash — but only if you can tolerate short-term volatility. If you need certainty, a cash JISA offers guaranteed protection, while a mixed approach can balance both safety and growth potential.
For a deeper look at when to save and when to invest, visit our
Save or Invest guide.
4. Who can open a JISA?
A Junior ISA can only be opened by a parent or legal guardian for a child under the age of 16.
This person is known as the Registered Contact and manages the account until the child turns 18.
The child must:
- Be under 18: - JISAs are available for any child up to their 18th birthday.
- Be a UK resident: - The child must be living in the UK, or have a parent who is a Crown employee serving overseas.
- Not have a Child Trust Fund (CTF): - A child can't hold both a JISA and a CTF. However, an existing CTF can be transferred into a JISA.
After the JISA is opened, anyone can contribute — parents, grandparents, friends, or other family members —
as long as the total annual allowance (currently £9,000) is not exceeded.
OPTIMLY INSIGHT
Contributions to a JISA do not count towards the contributor's own ISA allowance.
For example, a grandparent can use their full adult ISA allowance of £20,000 and still pay into their grandchild's JISA.
5. Allowance and contributions
Each child has a Junior ISA allowance of £9,000 per tax year (6 April to 5 April).
This total allowance applies across both cash and stocks & shares JISAs, and contributions can be split between them in any proportion.
Contributions can come from anyone — parents, grandparents, relatives, or family friends.
All payments count towards the same £9,000 limit for that child.
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Annual cap: - No more than £9,000 can be added in total each tax year, no matter how many people contribute.
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One account of each type: - A child can have one cash JISA and one stocks & shares JISA at any time, but contributions can be spread between both.
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No carry-over: - Any unused allowance does not roll over to the next tax year. If you don't use it, you lose it.
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Contributors' ISA limits: - Payments into a JISA are completely separate from the contributor's own ISA allowance.
For example, a grandparent can pay £9,000 into a grandchild's JISA and still use their full £20,000 adult ISA limit.
Example:
If both sets of grandparents want to save £100 per month each, that's £2,400 in a year.
Parents could then add £6,600 to fully use the £9,000 allowance.
OPTIMLY INSIGHT
Making regular monthly contributions can be just as powerful as lump sums.
Even £50 per month from birth, earning 5% annually, could grow to over £17,000 by age 18 — all tax-free.
6. Contributions and your own ISA allowance
Anyone can pay into a child's JISA — parents, grandparents, relatives, or family friends — and these contributions are entirely separate from the contributor's own ISA allowance.
This means, for example, a grandparent can continue contributing up to £20,000 into their own adult ISA while also making gifts into multiple grandchildren's JISAs — with no impact on their personal tax-free savings limit.
- Separate limits: - A £1,000 gift into a grandchild's JISA doesn't reduce your £20,000 adult ISA allowance.
- Multiple children: - You can contribute to as many children's JISAs as you like, as long as each child stays within their £9,000 annual JISA limit.
- Inheritance tax rules: - JISA payments count as gifts for IHT purposes. Small annual gifts (up to £3,000 per tax year) usually fall under HMRC's gift allowance, so contributions rarely trigger IHT issues unless your estate is substantial.
Example: A grandparent could contribute £500 each to five grandchildren's JISAs (£2,500 total), while still maxing out their own £20,000 ISA allowance in the same tax year.
OPTIMLY INSIGHT
Regular standing orders — even small monthly amounts like £20 or £50 — can steadily grow into a meaningful gift over 18 years without affecting your own tax-free savings.
7. Transfers and providers
Junior ISAs can be transferred between providers or switched between cash and stocks & shares at any time. Transferring can help you secure a better interest rate, reduce investment charges, or move to a provider with better tools and fund choices.
To preserve the JISA's tax-free benefits, you must use the provider's official transfer process. Withdrawing funds yourself means permanently losing the JISA's tax shelter.
Transferring a Junior ISA is straightforward but comes with specific rules. These ensure your tax-free allowance is preserved and the process is handled securely between providers.
- Partial transfers: - You can move some or all of a previous year's JISA balance. Current-year contributions must be transferred in full.
- Switching types: - You can convert a cash JISA to a stocks & shares JISA (or vice versa) without affecting your allowance.
- Transfer times: - Cash JISA transfers typically take 3-7 working days; stocks & shares JISA transfers may take 2-4 weeks due to selling and reinvesting assets.
- Check fees: - Most providers don't charge for transfers, but some investment platforms may apply exit fees — always check the terms first.
The provider you choose can significantly affect your child's returns over 18 years. For cash JISAs, focus on the best interest rates. For stocks & shares JISAs, platform fees and fund quality have a direct impact on growth.
- Best rates: - Seek cash JISAs with competitive interest that ideally beats inflation.
- Low fees: - For stocks & shares, consider both platform fees (e.g., custody/admin) and fund OCFs. Even a 0.5% difference in fees could cost thousands over 18 years.
- Ease of use: - Look for providers offering simple apps, automated reinvestment, and clear reporting tools.
A £10,000 investment growing at 5% annually for 18 years becomes roughly £24,000 with zero fees. Add just 1% in combined fees, and you lose almost £4,500 in potential returns. Keeping fees low can matter as much as choosing the right funds.
Use this calculator to see how annual fees affect long-term growth.
OPTIMLY INSIGHT
Look for platforms with fees under 0.3% annually and funds with OCFs under 0.2%. Over 18 years, the difference between low-cost and high-cost investments can be the equivalent of 2-3 extra years of contributions.
8. Access and maturity
Money in a Junior ISA is locked until the child's 18th birthday. This restriction helps ensure the savings are preserved for adulthood, whether for education, a first home deposit, or other major life milestones.
On the child's 18th birthday, the JISA automatically converts into a standard adult ISA. From this point, the child has full control and can choose to keep it as cash, move it into other ISA types, or withdraw the funds without restrictions.
Unlike other savings accounts, no withdrawals can be made before age 18 — even by parents or guardians. This guarantees that the funds remain untouched until adulthood.
9. Pros and cons
Junior ISAs offer powerful tax advantages and long-term growth potential, but they also come with restrictions that may not suit every family. Here's a balanced view:
Pros
- ✓ 100% tax-free interest, dividends, and investment growth.
- ✓ High annual allowance (£9,000 per child).
- ✓ Can split allowance between cash and stocks & shares JISAs.
- ✓ Encourages disciplined, long-term saving for adulthood.
- ✓ Contributions from anyone (parents, grandparents, friends).
Cons
- ✗ Funds locked until the child turns 18 — no early access.
- ✗ Cash JISA returns may not keep pace with inflation.
- ✗ Stocks & shares JISAs carry risk of capital loss.
- ✗ Full control passes to the child at 18 (regardless of maturity).
- ✗ Annual £9,000 limit may restrict larger contributions.
10. How to choose a JISA
When comparing Junior ISA providers, focus on cost, flexibility, and long-term potential. What matters most will depend on whether you prefer a cash JISA or a stocks & shares JISA:
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Interest rates: - For cash JISAs, look for providers with competitive, inflation-beating interest rates.
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Platform & fund fees: - For stocks & shares JISAs, consider both platform fees (admin, custody, or dealing costs) and fund charges (OCF). Even a 0.5% difference can significantly erode returns over 18 years.
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Investment choice: - Seek providers with diverse funds, ETFs, and model portfolios to suit your child's risk profile.
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Ease of management: - Apps and dashboards that allow automatic contributions, real-time tracking, and simple transfers can make long-term management much easier.
OPTIMLY INSIGHT
Fees are a silent killer of long-term growth. A £10,000 investment at 5% could grow to £24,000 over 18 years — but with 1% in fees, you'd lose almost £4,500. Use our
fee impact calculator to see the difference.
11. Example rates
Choosing the right Junior ISA provider can make a huge difference to your child's savings over time. Below are some of the most competitive cash JISA rates and popular stocks & shares JISA platforms to consider.
Here are the top cash Junior ISA rates currently available for easy access, notice, and fixed-term accounts:
For families looking to invest over 10 - 18 years, stocks & shares JISAs may offer better long-term growth potential. Here are some popular platforms:
Platform fee
£0
Fund OCFs
0.06% - 0.35%
Share trades
£1.50
Platform fee
£0
Fund OCFs
0.10% - 0.60%
Share trades
£0
Platform fee
£5-£10/month
Fund OCFs
0.10% - 0.45%
Share trades
1 free/month