Junior ISAs

By starting to save early, you can put your children on the path to a solid financial future. Junior ISAs let you save and invest on behalf of a child under 18.

And with no tax on the earnings, the money you put away can grow even faster, so they can start off MoneyFit too.


Who can have a Junior ISA?

You can open a Junior ISA for your child if they:

  • are under 18
  • live in the UK

From April 2015 anyone with money in a Child Trust Fund account can transfer it to a Junior ISA.

If a child was born between 2002 and 2011, they might have a Child Trust Fund (CTF). These can be transferred into a Junior ISA.

If the CTF is not transferred, when a child reaches 18 they’ll still be able to access the money.

How does a Junior ISA work?

  • A child’s parent or legal guardian must open the Junior ISA account on their behalf.
  • Money in the account belongs to the child, but they can’t withdraw it until they turn 18, apart from in exceptional circumstances. They can, however, start managing their account on their own from age 16.
  • The Junior ISA limit is currently £4,368 for the tax year 2019/20. If more than this is put into a Junior ISA, the excess is held in a savings account in trust for child – it cannot be returned to the donor. Parents, friends and family can all save on behalf of the child as long as the total stays under the annual limit.
  • No tax is payable on interest or investment gains.
  • When your child turns 18, their account is automatically rolled over into an adult ISA. They can also choose to take the money out and spend it how they like – for example, on driving lessons, further education or job training.

Types of Junior ISA

Your child can have a Junior Cash ISA, a Junior Stocks and shares ISA or both. If they have both, the most they can save is still subject to a £4,368 limit for the 2019/20 tax year.

Money fitness tip

From 6 April 2018 you can save £4,260in your child's Junior ISA.

Junior Cash ISAs

A Junior Cash ISA is essentially the same as a bank or building society savings account. But Junior Cash ISAs come with one big advantage – your child doesn’t have to pay tax on the interest they earn on their savings, and you don’t have to either.

Junior Stocks and shares ISAs

With a Junior Stocks and shares ISA account, you can put your child’s savings into investments like shares and bonds. Any profits you earn by trading shares or bonds are free from tax.

Investments are riskier than cash but could give your child a bigger profit, and the value of a Junior Stocks and shares ISA can go down as well as up.

Which Junior ISA is right for your child?

Your child can have a Junior Cash ISA, a Junior Stocks and Shares ISA or both. If they have both, the most they can save is still subject to a £4,368 limit for the 2019/20 tax year.

16 and 17 year olds can also contribute into the adult equivalent of a Cash ISA, up to £20,000 limit in the 2019/20 tax year. This is in addition to any money paid into their Junior ISA.

To read more about the pros and cons of each type of Junior ISA, see the MoneySavingExpert website.

If you’re not sure whether a Junior Stocks and shares ISA is right for your child, talking to an independent financial adviser can help you sort things out. See Choosing a financial adviser for more information.

Safe and secure?

How safe is a Junior Cash ISA?

Cash you put into UK banks or building societies is protected by the Financial Services Compensation Scheme (FSCS).

Up to £85,000 per person in any one authorised firm is safe even if the firm collapses.

Cash you put into UK banks or building societies (that are authorised by the Prudential Regulation Authority) is protected by the Financial Services Compensation Scheme (FSCS).

The FSCS savings protection limit is £85,000 (or £170,000 for joint accounts) per authorised firm.

It is worth noting that some banking brands are part of the same authorised firm.

If you have more than the limit within the same bank, or authorised firm, it’s a good idea to move the excess to make sure your money is protected.

Check if any of your banks are part of the same authorised firm and make sure your combined balances don’t go over £85,000.

How safe is a Junior Stocks and shares ISA?

Investment fund assets are held in safekeeping by a custodian on behalf of investors.

If an authorised investment firm goes into default, which means it is unable to pay claims against it, the Financial Services Compensation Scheme (FSCS) will pay compensation of up to £50,000 per person, per institution. 

You cannot claim compensation simply because the value of your investment falls below what you paid for it.

did you know?

As from April 2015 you can transfer a Child Trust Fund Account to a Junior ISA. So check if you can get a better rate of interest for your child's savings.

Information you should be given

A junior stocks and shares ISA is an investment product. Investment product providers must provide you with ‘key facts’ information that you can understand, covering:

  • what the investment is and how it works
  • the key risks including the risk of capital loss and counterparty risks
  • charges (the fees that will be deducted from your returns or capital), and
  • whether you’ll have the right to access to the Financial Ombudsman Service and the Financial Services Compensation Scheme.

Transferring a Junior ISA

You can switch between the two types of Junior ISA or from one provider to another whenever you like. But make sure you do this carefully so you don't lose the tax-free status on the money. A child can only have one Junior Cash ISA and one Junior Investment ISA at any one time.

As of April 2015, new rules mean you can transfer a Child Trust Fund account into a Junior ISA.

If things go wrong

If you're unhappy with the service you receive or want to make a complaint about a Savings Bond or Junior ISA you have bought, see the Financial Ombudsman Service's website.

Next steps

Last reviewed: 10/04/2019

This content has been provided by the Money Advice Service