A Junior ISA (JISA) is the simplest way to build a tax-free pot for a child. For 2026/27 you can pay in up to GBP 9,000 a year, and because that allowance is entirely separate from the adult GBP 20,000 ISA, you can fund both in the same year. Everything inside grows free of income tax and Capital Gains Tax, and at 18 it becomes the child's own adult ISA. This guide covers cash versus stocks and shares JISAs, who can pay in, the rules at 18, Child Trust Fund transfers, and a worked compounding example.
A Junior ISA is a tax-free savings or investment account for a UK-resident child under 18. It works just like an adult ISA: interest, dividends and capital gains earned inside it are completely free of tax and never need reporting to HMRC. The difference is that the money is locked away until the child turns 18, when they take full control.
A parent or guardian opens the account and manages it, but the money belongs to the child from day one. That makes a JISA ideal for long-term goals such as university costs, a first car or a deposit towards a future home.
The GBP 9,000 Allowance
For 2026/27 you can pay up to GBP 9,000 into a child's Junior ISAs across the tax year. This is separate from the adult GBP 20,000 ISA allowance, so a parent can use both in full in the same year. The allowance resets each 6 April and is use-it-or-lose-it: unused JISA allowance cannot be carried forward.
The GBP 9,000 can be split however you like between a cash JISA and a stocks and shares JISA. A child may hold one of each at any time, but only one of each type.
Cash vs Stocks and Shares
Feature
Cash JISA
Stocks & Shares JISA
Return
Tax-free interest
Tax-free growth and dividends
Risk
Capital safe
Value can fall
Best horizon
Short, or near age 18
Long, many years
Because a JISA is often held for the best part of two decades, a stocks and shares JISA gives a better chance of outpacing inflation, though the value can fall as well as rise. Many families start in stocks and shares for a young child and gradually shift towards cash as the 18th birthday approaches to lock in the value.
Who Can Pay In
Only someone with parental responsibility can open the JISA and act as the registered contact, but anyone can contribute, including grandparents, godparents and family friends, up to the combined GBP 9,000 annual limit.
There is a useful tax advantage here. If a parent puts money in an ordinary, non-ISA account for their child and it earns more than GBP 100 of interest a year, HMRC taxes that interest as the parent's. A Junior ISA sidesteps that GBP 100 rule entirely because all the income is tax-free, making it the natural home for parental gifts. See the tax on gifts of money guide for the wider rules.
What Happens at 18
On the child's 18th birthday the Junior ISA automatically converts into an adult ISA, and the young adult takes full legal control. They can withdraw the money, keep it invested, or carry on saving within the adult GBP 20,000 allowance.
Before 18, no withdrawals are allowed except in cases of terminal illness or death. There is no legal way to delay handing over control, so it is worth talking to the child about money well before they turn 18 so a large sum is not a shock.
Child Trust Fund Transfers
Children born between 1 September 2002 and 2 January 2011 may have a Child Trust Fund (CTF) instead of a JISA. A child cannot hold both, but you can transfer a CTF into a Junior ISA, which usually means lower charges and a wider choice of providers.
A CTF transfer does not use up the GBP 9,000 annual allowance; only fresh contributions count. The combined CTF or JISA contribution limit is the same GBP 9,000 a year. If you are unsure whether a child has a forgotten CTF, HMRC offers a free tracing service.
Worked Example: Saving from Birth
The Okafor family opens a stocks and shares Junior ISA for their newborn and pays in GBP 100 a month, GBP 1,200 a year, well within the GBP 9,000 allowance. Figures are illustrative and assume a 5 per cent annual return.
Total paid in over 18 years: GBP 1,200 x 18 = GBP 21,600.
Approximate value at 18 with 5 per cent growth: around GBP 35,000, all tax-free.
Tax-free gain from compounding: roughly GBP 13,000 on top of contributions.
Tax due: GBP 0, because all JISA growth is free of income tax and CGT.
The same GBP 13,000 gain in a taxable account could have triggered Capital Gains Tax once it exceeded the GBP 3,000 annual exempt amount. Model your own plan with the savings calculator and the ISA calculator.
Common Mistakes
Thinking the GBP 9,000 comes out of the adult GBP 20,000 allowance. It is entirely separate.
Saving for a child in an ordinary account and tripping the GBP 100 parental interest rule, when a JISA would be tax-free.
Assuming a parent can keep control after 18. The money becomes the child's to do as they wish.
Leaving an old Child Trust Fund in a high-charge default fund instead of transferring it to a JISA.
Withdrawing and re-depositing to switch providers instead of using the official transfer process, which loses the tax-free status.
The Junior ISA (JISA) allowance for 2026/27 is GBP 9,000. This is the total that can be paid into a child's ISAs across the tax year, whether held as a cash JISA, a stocks and shares JISA, or a split of both. Crucially, the GBP 9,000 is completely separate from the adult GBP 20,000 ISA allowance, so a parent can fund their own ISA and a child's JISA in the same year. Everything inside grows free of income tax and Capital Gains Tax, and the allowance resets each 6 April on a use-it-or-lose-it basis.
Who can open and pay into a Junior ISA?
A Junior ISA can be opened for any UK-resident child under 18 who does not already have a Child Trust Fund (or who transfers it across). Only a person with parental responsibility can open the account and act as the registered contact, but anyone, including grandparents, relatives and friends, can pay money in up to the GBP 9,000 annual limit. The money legally belongs to the child from the moment it is paid in, so contributions are gifts that cannot be taken back.
Should I choose a cash or stocks and shares Junior ISA?
It depends on the time horizon. Because a JISA is usually held for many years until the child turns 18, a stocks and shares JISA has historically given a better chance of beating inflation over the long run, though its value can fall as well as rise. A cash JISA pays tax-free interest with no risk to capital but may not keep pace with inflation over a decade or more. You can hold one of each and split the GBP 9,000 between them. Many parents lean towards stocks and shares for a newborn and shift towards cash as the child nears 18.
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What happens to a Junior ISA when the child turns 18?
On the child's 18th birthday the Junior ISA automatically becomes an adult ISA, and the now-adult gains full control of the money. They can withdraw it, leave it invested, or continue contributing within the adult GBP 20,000 allowance. Before 18, no withdrawals are allowed except in cases of terminal illness or death. Parents sometimes worry about handing over a large sum at 18; there is no legal way to delay this, so it is worth preparing the young adult for the responsibility.
Can a child have both a Junior ISA and a Child Trust Fund?
No. A child can hold either a Junior ISA or a Child Trust Fund (CTF), but not both at the same time. CTFs were offered to children born between 1 September 2002 and 2 January 2011 and are now closed to new accounts. If a child has an existing CTF, you can transfer it into a Junior ISA to access typically lower charges and a wider choice of providers; the transfer does not use up the GBP 9,000 allowance. The combined CTF or JISA annual limit is GBP 9,000.
Does Junior ISA interest count towards the parent's tax allowances?
No. Income inside a Junior ISA is the child's and is fully tax-free, so it never counts towards a parent's Personal Savings Allowance or any other allowance. This matters because of a separate HMRC rule: if a parent gives a child money held in an ordinary (non-ISA) account and it generates more than GBP 100 of interest a year, that interest is taxed as the parent's. The JISA wrapper sidesteps this entirely, which is one of its biggest advantages for parental gifts.
Can I transfer a Junior ISA between providers?
Yes. You can transfer a Junior ISA from one provider to another, or switch between a cash JISA and a stocks and shares JISA, without using any of the GBP 9,000 annual allowance, as long as you use the provider's official transfer process rather than withdrawing the money. A child can only hold one cash JISA and one stocks and shares JISA at a time, so transfers usually mean moving the full balance. Always ask the new provider to arrange the transfer to keep the tax-free status intact.
How much could a Junior ISA be worth at 18?
It depends on the amount paid in and the return. As an illustration, paying in GBP 100 a month from birth, around GBP 1,200 a year, at an assumed 5 per cent annual growth could grow to roughly GBP 35,000 by age 18 thanks to compounding, all tax-free. Maximising the full GBP 9,000 each year would build a much larger pot but is beyond most family budgets. Even modest, regular contributions started early benefit hugely from the long time horizon. Returns are not guaranteed and investments can fall in value.
Can grandparents open a Junior ISA for a grandchild?
No. Only a parent or legal guardian with parental responsibility can open a Junior ISA and act as its registered contact, but grandparents can absolutely contribute towards it once it exists. If a grandparent wants to save for a grandchild directly, they can either gift money for a parent to pay into the child's JISA, or use their own tax-free wrapper such as an adult ISA held in trust informally until the child is older.
What happens to a Junior ISA if a child moves abroad or their parents divorce?
The Junior ISA stays open and continues to grow tax-free regardless of where the family lives or whether the parents separate; only the registered contact managing it may need to be agreed or changed between parents. If the child themselves stops being UK tax resident, new payments can still generally continue, but it is worth checking with the provider, since some restrict further contributions for non-resident accounts. The GBP 9,000 allowance and tax-free status are unaffected by a change in family circumstances.
Disclaimer: This guide reflects 2026/27 UK Junior ISA rules. The GBP 9,000 allowance, the adult GBP 20,000 allowance and the CGT annual exempt amount can change at fiscal events. Investing carries risk and the value of a stocks and shares Junior ISA can fall. This is general information, not personal advice; refer to gov.uk for current official figures and consider a regulated adviser.
