Junior ISA explained — what to open, who can pay in, how to switch

①What a Junior ISA actually is

A Junior ISA is a tax-protected wrapper. Like an adult ISA, it is not a product in itself — you choose whether to hold cash, shares, funds or a mix inside it. The tax wrapper means HMRC charges:

• £0 Income Tax on interest earned in a Cash JISA
• £0 Capital Gains Tax on growth in a Stocks & Shares JISA
• £0 Dividend Tax on dividend income inside the wrapper

JISAs replaced Child Trust Funds (CTFs) for children born from 3 January 2011 onwards. (CTFs are still active for older children — see the separate guide.)

②Cash JISA vs Stocks & Shares JISA — which to open

You can have one Cash JISA and one Stocks & Shares JISA per child at the same time. The £9,000 annual limit is shared across both.

Cash JISA. Pays interest like a savings account. Currently 4–5% AER from competitive providers (Loughborough Building Society, Nottingham Building Society, Coventry, and a few high-street banks). FSCS protected to £85,000 per institution. Use when:

• The child is over 13 and the JISA may be used at 18 (short horizon)
• You want a guaranteed return — no market risk
• You're uncomfortable with the idea of the pot value falling

Stocks & Shares JISA. Holds funds, shares, or ETFs. Historically averages roughly 5–7% real return per year over long horizons, but volatile in any single year. Use when:

• The child is under 10 and the JISA has a 10+ year horizon
• You can tolerate seeing the balance drop temporarily
• You want the pot to outpace inflation, which Cash JISAs rarely do

Many parents start in cash for an infant, then switch to S&S when the long horizon emerges. Both are legitimate.

③Who can pay in

Anyone can contribute to a child's JISA — not just the parent who opened it.

• The registered contact (parent or legal guardian who opened it) makes the operational decisions.
• Grandparents, aunts, uncles, godparents, family friends, the child themselves — all can add money up to the £9,000 annual cap.
• Contributions are not deductible against the giver's tax. There’s no equivalent of the 25% pension-style top-up.

If a grandparent wants to gift larger sums, they can also consider a Junior SIPP (with tax relief on the way in), Premium Bonds, or a bare trust. See related guides.

④When the child takes control

Two transitions:

• Age 16. The child can manage the JISA — choose investments, change provider, see statements. But they cannot withdraw.
• Age 18. The JISA automatically becomes an adult ISA in the child's name. They can now withdraw, spend, or keep investing. The parent loses all access.

If the pot is meaningful at 18 (over £5,000), this is a hard moment. See the 18th-birthday handover guide for the conversation framework most parents wish they'd started a year earlier.

⑤How to switch JISA provider without losing the wrapper

The wrong way: withdraw the money from one JISA and pay it into a new one. That loses the JISA tax wrapper on the withdrawn amount.

The right way: a JISA transfer. The new provider initiates the transfer, the old one closes the account and ships the funds direct. The tax wrapper is preserved. Three rules:

• The transfer must include the full balance — you can't partial-transfer a JISA (different from an adult ISA).
• The current year's contributions must move along with everything else.
• Cash JISA ↔ Stocks & Shares JISA conversions are allowed during the transfer.

Reasons to switch:

• You opened a Cash JISA years ago at 1% AER and rates have moved.
• Your S&S JISA provider charges 0.8%+ in fees and you can move to a 0.15% platform.
• You want to consolidate JISAs across providers into one place.

⑥A realistic 18-year JISA scenario

Open a Stocks & Shares JISA at birth. Pay in £100/month, increased to £200 from age 10. Assume 5% real annual return (after inflation, after platform fee).

£44,500 in today's money in the child's name on their 18th birthday. Enough to cover most of a 4-year university experience, a first-house deposit in many parts of the UK, or 12–15 years of LISA contributions if rolled forward.

The numbers are illustrative, not guaranteed. Real returns vary widely with sequence-of-returns risk. But the order of magnitude — tens of thousands from £100–£200/month over 18 years — is realistic.

NCNational Curriculum links

• England — PSHE KS3/KS4 L24 (managing money), L17/L18 (financial planning)
• England — Citizenship KS4 (operation of the economy)
• Wales — Curriculum for Wales Progression Steps 3–5 (HWB AoLE)
• Scotland — CfE MNU 3-09a / 4-09a (financial education), HWB 4-21a
• NI — LLW KS4 Personal Finance

Full mapping in the curriculum map.