Pillar Guide · Updated June 2026
UK Junior ISA Guide 2026/27
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 20,000ISA, 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.
What Is a Junior ISA?
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 9,000into 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.