What is a Junior ISA?

If you are a parent or legal guardian you might be thinking about opening a Junior ISA. We take a look at what they are and how they work.

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If you are a parent or a legal guardian, you may want to think about your child’s financial future. A Junior ISA is one possible option. Let’s take a look at what a Junior ISA is and how it works.

What is a Junior ISA?

A Junior ISA is a long-term tax-free savings account set up by a parent or legal guardian on behalf of a child. This type of account is managed by an ISA provider.

Who can have one?

A child can have one provided they fulfil the following criteria:

  • They are under 18
  • They live in the UK

Some children living outside of the UK can get this type of account, but they must fulfil the following criteria:

  • Their parent has to be a Crown servant (e.g. in the armed forces, diplomatic service, or overseas civil service)
  • The child is dependent on that parent


How does a Junior ISA work?

Only a parent or legal guardian can open the account for the child. Any money put in the account belongs to the child, but they cannot withdraw it until they are 18. They can manage the account once they are 16.

The Junior ISA limit for the tax year 2021/22 is £9,000. Any interest or investment gain by the savings in the account is tax-free.

Once the child turns 18, the account becomes an adult ISA. It will therefore maintain its tax-free status until the money is withdrawn.

What are the different types?

There are two different types:

  • Junior Cash ISA
  • Junior Stocks and Shares ISA

You can open either type of account, or you can open both. But the total amount you can save tax-free remains £9,000 in the current tax year, irrespective of how many accounts the child has.

How soon can a child open an adult ISA?

Once a child is 16, they can open an adult Cash ISA and a Junior ISA in the same tax year.

Therefore a 16-year-old could save up to £29,000 in the following accounts:

  • Up to £20,000 in a Cash ISA
  • Up to £9,000 in a Junior Cash ISA, Junior Stocks and Shares ISA, or a combination of the two.

Can I have a Junior ISA and a Child Trust Fund?

No, you cannot, because the Junior ISA was introduced as a replacement for Child Trust Fund. However, as of April 2015, anyone with a Child Trust Fund can transfer their account to a Junior ISA.

Where can I get a Junior ISA?

They are available from a wide range of banks, building societies, credit unions, friendly societies and stockbrokers.

To open an account, you will need proof that you are the child’s parent or legal guardian, and some official proof of identification for the child. This could be a birth certificate or a passport.


Is it worth it?

There is no definitive answer because it depends on your individual circumstances. However, there are some things that you should think about before opening a Junior ISA.

The child cannot access the money until they turn 18

If you do open a Junior ISA, make sure you won’t need the money for anything else that your child might require in the meantime.

Only the child can access the account

Having access to a large lump sum at such a young age might not be the best idea. If you have any reservations at all, then opening a different type of savings account in your name might be a solution.

Junior Stocks and Shares ISAs can lose money

Investment in the stock market is a risk, and the value of your investment can go down as well as up.

Take home

Further information about Junior ISAs is available from the gov.uk website and the Money Advice Service website.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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