What is a junior ISA?
A junior ISA is a long-term savings or investment account where the money is locked-in for the child until they turn 18.
A parent or legal guardian can open a junior ISA for a child under 18 (under 16 for a OneFamily Junior ISA) who doesn't already have a child trust fund.
Only the child will be able to access the money, and only when they turn 18.
Here's a quick breakdown of what a junior ISA is and how it works:
What types of junior ISA are available?
There are two types of junior ISA to choose from:
- cash junior ISAs
- stocks and shares junior ISAs
Both types of junior ISA can be used to build up a lump sum for a child, which they'll be able to access once they turn 18, but they vary in terms of risk and growth potential.
What's the difference between cash junior ISAs and stocks and shares junior ISAs?
A cash junior ISA keeps your money saved in cash, meaning it grows by building interest like savings accounts do, while money in a stocks and shares junior ISA is invested in the stock market.
Over the long term, a stocks and shares junior ISA offers the potential for larger returns. In fact, in every 10-year period since 2000, stocks and shares have out-grown interest rates.* But it’s worth remembering that the value of your investments could go down as well as up. This is normal for this kind of investment, but it does mean the child could get back less than has been paid in.
Cash is more secure, but the cost of living generally increases over time (inflation). If interest rates aren't higher than inflation, then the money in a cash junior ISA might not buy as much in the future as it could now.
*Source: Barclays GILT study 2023.
Junior ISA rules and limits
What is the current junior ISA allowance?
The annual allowance for junior ISAs is £9,000 for the current tax year. That means you can pay up to £9,000 into your child’s Junior ISA over the course of this tax year, which ends on 5 April. This allowance resets when the new tax year begins on 6 April.
Who can pay into a junior ISA?
Although only legal guardians can open a junior ISA for a child, anyone can pay into it, meaning grandparents, aunts and uncles and even family friends can contribute to your child's future. If there are several people paying into a child's junior ISA, it's best to keep an eye on the junior ISA annual allowance to make sure no payments go over the limit.
You can open a OneFamily Junior ISA for a child with a direct debit of just £10 a month.
How many junior ISA accounts can a child have?
A child can have two junior ISAs open at any one time—one stocks and shares junior ISA and one cash junior ISA. Once an account has been opened, you can then pay into that junior ISA account as you see fit.
It's worth bearing in mind that the £9,000 junior ISA annual allowance is per child, so this allowance will be shared between any junior ISA accounts in your child's name. This means that if your child has both a cash junior ISA and a stocks and shares junior ISA, you can only pay up to £9,000 total into both junior ISAs combined.
Key features of Junior ISA accounts
Your child is eligible for a junior ISA if they are:
- under 18 years of age (under 16 for a OneFamily Junior ISA)
- a resident in the UK
- and/or have not been eligible for a child trust fund account
With a junior ISA, your child won't need to pay any tax on the money they withdraw when they turn 18.
This includes any money the account has made, either from building interest (cash junior ISA) or from being invested in the stock market (stocks and shares junior ISA).
Tax advantages depend on individual circumstances and may change in the future.
You can open a cash junior ISA or a stocks and shares junior ISA, or set up one of each for the same child.
If your child has both, they'll share the £9,000 junior ISA annual allowance. This means that total payments made into both accounts can't be more than £9,000 over the course of the tax year.
You can invest significantly less than the tax year limit of £9,000 if you wish to, either as a lump sum, or as a regular investment. Please bear in mind that any unused allowance at the end of the tax year is lost and cannot be added to the allowance for subsequent years.
If you've got any questions about the rules, allowances or limits of our Junior ISAs, explore our Junior ISA FAQs.
What would you like to do next?
Start saving today
Your kids deserve a head start. Invest in your children's future with our stocks and shares Junior ISA for tax-free savings
Transfer a child trust fund or junior ISA
Transferring a child trust fund or junior ISA from another provider to OneFamily is simple and we don't charge you to do so.
Learn more about junior ISAs
Find out more about how a JISA can help you save for your child's future.