Junior ISA explained: the £9,000 allowance, cash vs stocks and shares
How Junior ISAs work in 2026/27: who can open one, the £9,000 yearly allowance, cash vs stocks and shares, what happens at 18, Child Trust Fund transfers and how much regular saving could grow.
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How Junior ISAs work
- Who can have one: children under 18 living in the UK. Children who had a Child Trust Fund can transfer it into a Junior ISA.
- Who opens it: a parent or guardian. From 16, a child can manage their own Junior ISA.
- Who can pay in: anyone. Parents, grandparents and friends can all add money.
- Allowance: £9,000 per child in the 2026/27 tax year, across all their Junior ISAs. It does not use any adult's own £20,000 ISA allowance.
- Access: the money is locked until 18, except in very limited circumstances such as terminal illness.
- At 18: it becomes an adult ISA in the child's name, and they can spend it or keep it invested.
Source: Hargreaves Lansdown: Junior ISA allowance.
Cash or stocks and shares?
A child can have one of each and split the £9,000 between them.
| Cash Junior ISA | Stocks and shares Junior ISA | |
|---|---|---|
| Risk | Value cannot fall | Value can go down as well as up |
| Growth | Interest rate, often struggles to beat inflation over long periods | Has historically grown more over long periods, not guaranteed |
| Suits | Short time frames, or very cautious savers | Young children, with 10 or more years until 18 |
With up to 18 years to go, many parents choose stocks and shares, often a low-cost global index fund. Read index funds and ETFs explained.
How much could it grow?
These examples assume growth of 5% a year after fees. Real returns will be higher or lower.
| Saving each month | From birth to 18 | Paid in |
|---|---|---|
| £50 | about £17,300 | £10,800 |
| £100 | about £34,500 | £21,600 |
Junior ISA or something else?
- Saving in your own name keeps control, but the money is yours, not the child's, and uses your own allowances.
- A Junior SIPP (children's pension) gets 20% tax relief added but cannot be touched until the child is in their late 50s.
- Premium Bonds can be bought for children, but returns depend on prize luck.
The big decision with a Junior ISA is that the child gets full control at 18. Some parents are comfortable with that, some prefer to keep money in their own name.
Child Trust Funds
Children born between 1 September 2002 and 2 January 2011 were given a Child Trust Fund. It can be moved into a Junior ISA, which often has lower fees and more choice. If you are 18 or over and never claimed yours, the money is still yours to find.
Common questions
Can grandparents open a Junior ISA?
No, only a parent or guardian can open one. But grandparents can pay into an existing Junior ISA.
Can I take money out of my child's Junior ISA?
No. The money belongs to the child and is locked until they turn 18, apart from rare exceptions.
What happens to a Junior ISA at 18?
It automatically becomes an adult ISA in the child's name. They can withdraw it, keep saving into it, or move it to another provider.
This is general information, not personal tax or financial advice. Tax rules change and depend on your circumstances, so check GOV.UK or speak to an accountant before acting.
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