Junior ISAs Explained: Building Your Child's Financial Future
Everything UK dads need to know about Junior ISAs - from 2025/26 allowances and best providers to investment strategies that could turn regular savings into serious money by 18.
Junior ISAs Explained: Building Your Child's Financial Future
If you've been meaning to set up savings for your kids but haven't got round to it, this is your guide. Junior ISAs are one of the best tools available for long-term child savings in the UK, and the earlier you start, the more time compound growth has to work.
This guide covers the 2025/26 allowances, compares providers with real costs, and shows you what regular contributions could actually be worth when your child turns 18.
Junior ISA Basics
What Is a Junior ISA?
A Junior ISA (JISA) is a tax-free savings or investment account for children under 18. All growth—interest, dividends, capital gains—is completely free from UK tax.
Key features:
- Annual allowance: £9,000 (2025/26 tax year)
- Available for any UK resident child under 18
- Money belongs to the child, locked until they turn 18
- Parent or guardian opens and manages the account until the child is 16
- Child takes control at 18, when it automatically becomes an adult ISA
Two Types of Junior ISA
Cash Junior ISA:
- Money earns interest
- Capital is guaranteed (you won't lose what you put in)
- Returns are currently modest (typically 4-5% with the best rates)
- Good for short-term savings (child close to 18)
Stocks and Shares Junior ISA:
- Money is invested in funds, shares, or investment trusts
- Returns are not guaranteed and value can fall
- Historically produces much higher long-term returns
- Good for long-term savings (child is young)
You can have one of each, splitting the £9,000 allowance between them if you want.
The Case for Stocks and Shares
Here's the uncomfortable truth: Cash JISAs are safe but won't build serious wealth over 18 years.
Historical returns:
- UK cash savings: ~2-4% per year (often below inflation)
- Global equities: ~8-10% per year average (though variable year-to-year)
Over 18 years, that difference is enormous.
Example: £100/month from birth
| Scenario | Total contributed | Value at 18 |
|---|---|---|
| Cash JISA (4%) | £21,600 | ~£31,000 |
| S&S JISA (8%) | £21,600 | ~£48,000 |
| S&S JISA (10%) | £21,600 | ~£58,000 |
The same contributions, but the stocks and shares version could be worth nearly twice as much.
The catch: Investment values can go down, especially in the short term. If your child is 15 and needs the money at 18, stocks and shares might not be appropriate. But for a newborn with an 18-year horizon, history strongly favours investing.
The Numbers: What Regular Savings Could Become
Let's get specific about what realistic contributions could be worth.
Scenario 1: Modest Regular Savings
£50/month from birth, invested in global equities (assuming 8% average return)
| Age | Total contributed | Estimated value |
|---|---|---|
| 5 | £3,000 | £3,700 |
| 10 | £6,000 | £9,200 |
| 15 | £9,000 | £17,400 |
| 18 | £10,800 | £24,000 |
That's £24,000 for your child at 18—enough for a university deposit, first car, or house deposit contribution.
Scenario 2: Maximum Contributions
£9,000/year from birth (£750/month), invested in global equities
| Age | Total contributed | Estimated value |
|---|---|---|
| 5 | £45,000 | £56,000 |
| 10 | £90,000 | £140,000 |
| 15 | £135,000 | £265,000 |
| 18 | £162,000 | £400,000+ |
Obviously, not many families can max out a JISA. But if grandparents, aunts, uncles, and godparents all contribute, it adds up. Anyone can contribute to your child's JISA—you just need to give them the account details.
Scenario 3: Starting Later
What if your child is already 8 and you haven't started?
£100/month from age 8, invested in global equities
| Age | Total contributed | Estimated value |
|---|---|---|
| 10 | £2,400 | £2,700 |
| 13 | £6,000 | £7,500 |
| 16 | £9,600 | £13,200 |
| 18 | £12,000 | £17,000 |
Still £17,000—better than not starting at all. The lesson: the best time to start was when they were born; the second-best time is now.
Choosing a Provider
Not all Junior ISA providers are equal. Platform fees eat into returns over time, and the difference over 18 years can be thousands of pounds.
Fee Comparison (Stocks & Shares JISAs)
| Provider | Annual fee | Notes |
|---|---|---|
| Fidelity | No fee on JISAs | Excellent for small pots |
| Hargreaves Lansdown | No fee on JISAs | Wide investment range |
| AJ Bell | 0.25% (capped at £2.50/month) | Good middle ground |
| Vanguard | 0.15% | Very low fees, own funds only |
| Interactive Investor | £36/year | Better for larger pots |
The Impact of Fees Over 18 Years
Assuming £100/month contributions and 8% growth:
| Fee structure | Value at 18 | Total fees paid |
|---|---|---|
| No fees | £48,000 | £0 |
| 0.15% fee | £47,000 | ~£1,000 |
| 0.25% fee | £46,000 | ~£2,000 |
| 0.40% fee | £44,500 | ~£3,500 |
Bottom line: For small pots (under £10,000), no-fee providers like Fidelity or Hargreaves Lansdown are usually best. For larger pots, percentage fees can exceed fixed fees, so Interactive Investor or similar might win.
Cash JISA Rates (If You Want Cash)
As of early 2026, the best Cash Junior ISA rates are around 4.5-5%, but these change frequently. Check comparison sites like MoneySavingExpert or Moneyfacts for current best buys.
Note: You can only open one Cash JISA and one Stocks & Shares JISA at a time, though you can transfer between providers.
How to Open a Junior ISA
Step-by-Step
- Choose a provider (see comparison above)
- Have your child's details ready: Full name, date of birth, National Insurance number (if they have one), address
- Have your own ID ready: Passport or driving licence, proof of address
- Complete the application: Usually takes 10-15 minutes online
- Set up contributions: One-off payment, regular direct debit, or both
- Choose investments (for stocks and shares JISA)
What to Invest In
If you're not a confident investor, don't overcomplicate this. A simple global tracker fund is a sensible default:
Good options:
- Vanguard FTSE Global All Cap Index – Covers developed and emerging markets
- HSBC FTSE All-World Index – Similar broad global exposure
- Fidelity Index World – Developed markets focus
- Vanguard LifeStrategy funds – Mix of shares and bonds (LifeStrategy 80% or 100% equity for long horizons)
You don't need to pick individual shares or time the market. A global tracker gives you diversified exposure to thousands of companies worldwide.
Lump Sum vs Regular Investing
Lump sum: Statistically, investing a lump sum early tends to outperform drip-feeding because markets generally rise over time. If grandparents give £1,000 for a birthday, invest it straight away.
Regular investing: Has the benefit of "pound-cost averaging"—buying more units when prices are low, fewer when prices are high. Reduces the risk of investing everything at a market peak.
Best approach: Invest lump sums as you receive them, plus regular monthly contributions that you won't miss.
Common Questions
What happens at 18?
On their 18th birthday, the Junior ISA automatically converts to an adult ISA in their name. They gain full control and can withdraw, continue saving, or invest differently.
The money is legally theirs—you can't prevent them accessing it at 18, even if you contributed everything.
Can I access the money before they're 18?
No. The money is locked until the child turns 18. The only exception is if the child is terminally ill or dies.
What about for university?
Junior ISA money isn't considered in student loan means-testing—it belongs to the child, not the parents. However, having significant savings might affect their decision about whether to take a full maintenance loan.
A common approach: use JISA money for things student loans don't cover (deposits, car, travel), not for tuition or living costs.
What about Child Trust Funds?
Child Trust Funds (CTFs) were the predecessors to Junior ISAs, available for children born between 1 September 2002 and 2 January 2011. If your child has a CTF, you can transfer it to a Junior ISA for better rates and more provider choice.
Can grandparents contribute?
Yes—anyone can contribute to a child's Junior ISA. Just provide them with the account details. This is a great way to make birthdays and Christmas more meaningful than another toy they'll forget about.
What about inheritance tax?
Contributions to a Junior ISA from grandparents are exempt from inheritance tax if the grandparent survives 7 years after the gift (standard gift rules apply). This makes JISAs a useful part of intergenerational wealth planning.
Building Financial Literacy
A Junior ISA isn't just about the money—it's an opportunity to teach your child about finances.
As they grow:
- Age 5-7: Talk about "money that grows" and the idea of waiting for rewards
- Age 8-10: Show them their statement, explain compound interest simply
- Age 11-13: Discuss what the money could be for, involve them in decisions
- Age 14-16: Let them track the account, understand market ups and downs
- Age 16-18: Discuss their plans, whether to keep investing or withdraw
The best outcome isn't just the money at 18—it's a young adult who understands investing and has healthy financial habits.
Getting Started Today
If you've read this far and haven't opened a Junior ISA yet, here's your action plan:
- This week: Choose a provider (Fidelity or Hargreaves Lansdown for simplicity and no fees)
- This weekend: Complete the application (15 minutes)
- This month: Set up a standing order for whatever you can afford (even £25/month)
- For investments: Pick a global tracker fund and set it to reinvest dividends
Don't overthink it. The biggest mistake is waiting for the "perfect" time or the "right" amount. Start with what you have, increase when you can, and let time do the heavy lifting.
Your future 18-year-old will thank you.
Worried about university costs specifically? Read our guide to saving for your child's university education.