What Is a Junior ISA and How Does It Work?

A Junior Individual Savings Account (JISA) offers a long-term, tax-efficient savings and investment opportunity for children. This specialized savings vehicle, available in the United Kingdom, helps families build a financial foundation for a child’s future. The funds within a JISA are specifically earmarked for the child and benefit from a tax-free growth environment.

Core Features of a Junior ISA

A Junior ISA is a dedicated savings and investment account designed for individuals under the age of 18 residing in the United Kingdom. Its primary purpose is to provide a tax-efficient method for accumulating funds that will become accessible to the child upon reaching adulthood.

Eligibility for a JISA requires the child to be under 18 years old and a resident in the UK. A child cannot hold both a JISA and a Child Trust Fund (CTF) simultaneously; if a CTF exists, it must be transferred into a JISA upon opening the new account. A parent or legal guardian typically initiates the opening of a Junior ISA, acting as the registered contact for the account.

Once a JISA is established, anyone can contribute to it, including grandparents, other relatives, and friends. While the account is opened and managed by an adult, all money deposited into a Junior ISA legally belongs to the child.

Junior ISA Account Types and Contribution Limits

Junior ISAs come in two primary forms: the Cash Junior ISA and the Stocks & Shares Junior ISA. A child is permitted to hold both a Cash Junior ISA and a Stocks & Shares Junior ISA simultaneously, though they can only have one of each type.

A Cash Junior ISA operates much like a traditional savings account, where money earns interest over time. This option is generally considered lower risk, as the capital is protected from stock market fluctuations, but its growth may be affected by inflation. Conversely, a Stocks & Shares Junior ISA invests contributions in market assets such as stocks, bonds, or funds. This type carries a higher potential for growth over the long term, but also involves the risk that investment values can decrease.

For the 2025/2026 tax year, the total amount that can be contributed to a child’s Junior ISA or ISAs is £9,000. This annual limit applies across both types of Junior ISAs if a child holds one of each, meaning the combined contributions to both accounts cannot exceed this figure. The tax year for these purposes runs from April 6th to April 5th of the following year, and any unused allowance from one tax year does not carry over.

Managing and Accessing Junior ISA Funds

Funds held within a Junior ISA grow in a tax-efficient manner, meaning all income and capital gains generated are exempt from UK taxes. Contributions made to the JISA are typically from income that has already been taxed.

The money within a Junior ISA unequivocally belongs to the child, but strict rules govern its access. Funds generally cannot be withdrawn until the child reaches 18 years of age, with the sole exception being in cases of terminal illness. While the child cannot access the funds earlier, they gain the ability to manage their Junior ISA account independently from age 16, though withdrawal remains prohibited until their 18th birthday.

Upon the child’s 18th birthday, the Junior ISA automatically converts into an adult Individual Savings Account (ISA). At this point, the now-adult gains full control over the funds and can choose to continue investing or withdraw the money for any purpose. The tax-free status on growth and withdrawals remains intact.