What is a Junior ISA?

A Junior ISA is a tax-efficient way to save or invest for a child. No tax is due on income or capital gains inside the account, and money can be saved in cash or invested in stocks and funds.

Junior ISAs are a useful stepping stone to help the child develop their own saving and investing habit as they grow older. A Junior ISA will automatically convert into a Cash ISA or Stocks and shares ISA once the account holder turns 18.

They are a good way to help fund the cost of university or to buy a first home. Just remember that the money belongs to the account holder once inside the Junior ISA and they are free to use it as they like at age 18.

Let’s walk through exactly what a Junior ISA is, how it works, who can open and pay into an account, how to make contributions, and how to decide whether it’s right for your child.

Cash vs investment Junior ISA

A Junior ISA is a tax-efficient savings or investment account for children under 18. It works a lot like an adult ISA – money grows free from income tax and capital gains tax – but with one key difference: the child can’t touch it until their 18th birthday.

There are two types of Junior ISA:

A child can hold one of each account type, and you can mix and match how you pay in, so long as the total stays within the £9,000 annual Junior ISA allowance.

In addition to funds and shares, you can also hold bonds, ETFs (exchange-traded funds), and investment trusts in a Stocks and shares Junior ISA.

Learn more about investing for beginners

Who can open a Junior ISA?

Opening a Junior ISA is straightforward:

• For a child under 16, a parent or legal guardian needs to open and manage the account
• Once the child turns 16, they can open one themselves, although they still can’t withdraw anything until 18
   

Who can pay into a Junior ISA?

After the account is set up, anyone – parents, grandparents, aunts, uncles, family friends – can make contributions. It’s a great option for birthday money, Christmas gifts or lump sum contributions from relatives. 

The parent or legal guardian can pay in the Junior ISA by linking their bank account to the ISA to make contributions or set up a direct debit for regular payments. It’s also easy for others to pay into the Junior ISA; they just need to request a payment link from the person managing the account.

Read about paying into a Junior ISA

Junior ISA rules and limits

Junior ISAs come with several rules – but they’re easy to get your head around:

• The Junior ISA account belongs to the child, not the parent or guardian
• Money is locked in until age 18
• You must stay within the £9,000 annual Junior ISA allowance
• Transfers between providers are allowed – but must be done using an official transfer process

How much can you contribute to a Junior ISA?

Up to £9,000 can be paid into a child's Junior ISAs each year. That's the maximum for all money paid into their Cash and Stocks and shares Junior ISA accounts, such as from parents and grandparents.

How far could your Junior ISA contributions go?

AJ Bell figures show that putting away £500 a year from birth could grow to almost £15,000 by age 18, assuming 5% annual returns excluding platform charges.

Even if you start later, when your child is 10 years old, putting away £500 a year can equate to just over £5,000 when they reach their 18th birthday.

The key thing is that it’s never too early, or too late, to start. Whether you’re able to save a little or a lot, taking that first step can make a lasting difference to your child.

It’s a great reminder that you don’t need to contribute the full allowance to build something meaningful – consistency matters.

Can you withdraw money from a Junior ISA?

Money cannot be withdrawn from a Junior ISA until the child turns 18.

This can be frustrating if you want flexibility – but it’s also what makes Junior ISAs such strong long-term tools. The money stays ringfenced for your child’s future.

Junior ISA benefits and disadvantages

Junior ISAs can be a powerful way to help a child as they finish school and start adult life, but it’s worth considering both the benefits and disadvantages.

How can you open a Junior ISA with AJ Bell?

Opening a Junior ISA online with AJ Bell is quick and hassle free.

What you’ll need to open an account:

• Basic details for you and your child
• Your National Insurance number, and your child’s number if they have one
• Details of any Child Trust Fund (CTF) or existing Junior ISA you’re transferring

Once you’re set up, you can invest in a wide choice of funds, shares and low-cost options to build a long-term portfolio for your child.

Open a Junior ISA

AJ Bell Junior ISA charges

There are two sets of charges with AJ Bell Junior ISAs – one is our charge for holding your investments and the other is a fee when you buy or sell shares, funds or bonds.

Our charges offer excellent value and are clearly set out – so you’ll always know exactly what you’re paying – and are among the lowest in the market.

AJ Bell Junior ISA FAQs