Our guide to junior ISAs
A junior ISA is a long-term savings or investment account set up by a parent or legal guardian to put money aside for a child's future.
Junior ISA explained
There are two types of children's ISAs available:
- 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 will be able to access once they turn 18. 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.
The option(s) you choose will likely depend on your attitude to risk and which of the product features are most appropriate for your circumstances, so it's recommended you're aware of the differences between cash and stocks and shares.
What's the difference between cash junior ISAs and stocks and shares junior ISAs?
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 its value can fall as well as rise. 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), so if interest rates aren't higher than inflation the final amount probably won’t 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 (the child must be under 16 to be eligible for a OneFamily Junior ISA)
- a resident in the UK
- and/or have not been eligible for a child trust fund account
A junior ISA can be an efficient way of saving for your children because they 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 in a cash account or from being invested in the stock market.
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 account of each kind for the same child. It's up to you how you choose to split your investment over these two accounts.
Just remember: the total payments that can be made into the accounts cannot exceed the current tax year limit of £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.
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Learn more about junior ISAs
Find out more about how a JISA can help you save for your child's future.