What is a Junior ISA?

Full answer

A Junior ISA (JISA) is a long-term tax-free savings or investment account for children under 18 who live in the UK. **2026/27 key facts:** - **Annual allowance:** £9,000 (separate from the adult £20,000 ISA allowance). - **Who can open it:** A parent or guardian with parental responsibility for a child under 18. - **Who can contribute:** Anyone — parents, grandparents, relatives, friends — up to the £9,000 combined annual limit. - **Access:** The child cannot access the money until their **18th birthday**, at which point the JISA automatically becomes an adult ISA. They can then use the money for anything. **Two types of JISA:** 1. **Cash JISA:** Earns interest tax-free. Lower risk, suitable for shorter-term goals or cautious families. Best rates currently around 5%. 2. **Stocks & Shares JISA:** Invested in shares, funds, or ETFs. Higher potential returns over 18+ years but involves market risk. Suitable for children with many years to go before 18. You can hold one Cash and one Stocks & Shares JISA simultaneously for the same child. **Child Trust Fund (CTF) transfers:** Children who had a CTF (issued 2002–2011) can transfer it to a JISA. The CTF provider must authorise the transfer. JISAs typically offer better rates than legacy CTFs. **No early withdrawal:** Unlike adult ISAs, JISAs have no flexible withdrawal feature — funds are locked until 18 except in cases of terminal illness or death. **IHT note:** Contributions to a child's JISA from grandparents or other family members are a potentially exempt transfer (PET) from the donor's estate for IHT purposes — relevant if large gifts are involved.

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