What Is a Junior ISA (JISA) and How Does It Work?
Discover how a Junior ISA (JISA) helps you save and invest tax-efficiently for your child's future, from setup to maturity.
A Junior Individual Savings Account (JISA) offers a long-term, tax-efficient savings and investment avenue for children. It allows parents, guardians, and others to save or invest money on a child’s behalf, aiming to provide a financial foundation when the child reaches adulthood. Funds within a JISA grow over time, free from certain taxes.
Understanding JISA Fundamentals
A JISA can be opened by a parent or legal guardian for a child under 18. The money in the account belongs to the child. A child is eligible if they do not already have a Child Trust Fund, unless that fund is transferred into a JISA.
There are two distinct types of JISAs available: a Cash JISA and a Stocks and Shares JISA. A Cash JISA functions similarly to a traditional savings account, with money earning interest. A Stocks and Shares JISA involves investing money in various assets like stocks, bonds, or funds, aiming for potential capital growth or income. A child can hold both a Cash JISA and a Stocks and Shares JISA simultaneously.
Anyone can contribute to a JISA once established, including parents, grandparents, and friends. Contributions are subject to an annual limit, which for the 2025 to 2026 tax year is £9,000 across both types of accounts.
Funds cannot be accessed until the child reaches 18 years of age. This provides a lump sum to the child upon turning 18, which they can then use for various life goals.
A significant advantage of a JISA is its favorable tax treatment. Any growth, income, or capital gains generated within the JISA are generally exempt from UK income tax and capital gains tax. This applies to both Cash and Stocks and Shares JISAs. Tax rules can change over time.
Establishing a JISA
Establishing a JISA involves choosing a financial institution. Various providers, including banks, building societies, and investment platforms, offer JISAs. The choice depends on factors like the JISA type (Cash or Stocks and Shares), investment options, and management preferences.
Opening a JISA requires personal information and documentation for both the parent/guardian and the child. This includes full names, dates of birth, and current addresses. The parent or guardian must provide identification documents, such as a passport or driver’s license, and proof of address.
The application process can be completed online, by post, or in person. Applicants must accurately fill in all required personal and financial details.
Once approved, an initial contribution is typically required to activate the JISA. This funding can be made through various methods, such as direct debit or bank transfer. Minimum initial contributions vary by provider.
JISA Management and Progression
Once established, ongoing contributions can be made to the JISA. These can be regular payments, like monthly direct debits, or one-off payments. Funds can be added via bank transfer or debit card, depending on the provider.
An existing JISA can be transferred from one provider to another. The new provider typically initiates this process, guiding the account holder through the necessary steps and forms.
When the child reaches 16 years of age, they gain the ability to manage the JISA account themselves. This control includes making investment decisions for a Stocks and Shares JISA or choosing to transfer the account to a different provider. However, the child cannot withdraw any funds from the JISA at this age.
Upon the child’s 18th birthday, the JISA automatically transitions into an adult Individual Savings Account (ISA). At this point, the now-adult child gains full control over the funds. They can continue to save or invest within the adult ISA, withdraw all or part of the funds, or transfer the entire balance to a different adult ISA provider.