A Junior ISA is a tax-free savings or investment account for a child who is under 18 and living in the UK. For the 2026/27 tax year the total that can be paid in for one child is £9,000, split however you like between a cash Junior ISA and a stocks and shares Junior ISA. Interest, dividends and gains inside the account are free of tax, the money belongs to the child from the moment it goes in, and nobody can take it out until the child turns 18, apart from narrow exceptions for terminal illness and death.
Who can have a Junior ISA and who opens it
The child must be under 18 and living in the UK. A child living abroad qualifies only where a parent is a Crown servant, such as a member of the armed forces or the diplomatic service, and the child depends on that parent for care.
- Who opens it. For a child under 16, only a parent or guardian with parental responsibility can open the account. Children aged 16 and 17 can open their own;
- How many accounts. A child can hold one cash Junior ISA and one stocks and shares Junior ISA at any one time, so at most two;
- Child Trust Funds. A child cannot hold a Junior ISA and a Child Trust Fund at the same time. Children born between 1 September 2002 and 2 January 2011 will usually have a Child Trust Fund, which can be transferred into a Junior ISA by asking the new provider to arrange it;
- The registered contact. The person who opens the account manages it and is the only person who can change its type, move it to another provider or report changes of circumstances.
How the £9,000 limit works
Anyone can pay into a Junior ISA: parents, grandparents, godparents or family friends. The limit is per child, not per contributor, so the £9,000 is the combined total from everyone for the tax year running from 6 April to 5 April. The regulations say any excess is not a valid subscription and must not be held in the account, so providers will refuse or return it.
The limit is shared between the two account types. If £2,000 goes into the child's cash Junior ISA between 6 April 2026 and 5 April 2027, no more than £7,000 can go into the stocks and shares Junior ISA in the same year. Money can be transferred between the child's own Junior ISAs, and from a Child Trust Fund into a Junior ISA, but it cannot be transferred between a Junior ISA and an adult ISA.
Unused allowance does not carry forward. A family that misses a year cannot pay in £18,000 the following year.
Why parents use a Junior ISA rather than a savings account
The Junior ISA's main tax advantage for parents is that it sidesteps the parental settlement rule. Normally, if a parent gives money to their own child under 18 and that money produces more than £100 of income in a tax year, all of the income is taxed as the parent's, not the child's. HMRC's Junior ISA guidance states that income generated from parental subscriptions to a Junior ISA does not count towards the parent's income under these rules.
Worked example. A parent who pays income tax at 40% puts £10,000 into an ordinary savings account in their eight-year-old's name, earning a hypothetical 4%. The £400 of interest is above the £100 threshold, so all £400 is treated as the parent's income, not just the excess. The same £10,000 placed in a cash Junior ISA over two tax years produces interest that is tax-free and is not attributed back to the parent.
The £100 rule applies only to gifts from parents and step-parents. Money from grandparents in an ordinary account is not caught by it, although the Junior ISA wrapper still removes any tax on the child's own income.
What happens at 16 and at 18
At 16 the child can apply to the provider to become the registered contact and manage the account, but cannot withdraw anything. At 18 the account automatically becomes an adult ISA in the child's name, and the young adult can withdraw the whole balance or keep it invested.
This is the point many parents underestimate. The money is the child's outright. A parent cannot keep control past 18 or decide how the funds are used. If you want a say in what the money pays for, such as university costs or a house deposit, a Junior ISA is the wrong vehicle. A trust or keeping the savings in your own name gives you that control, though each brings its own tax consequences.
Since 6 April 2024, the regulations require an individual to be 18 or over to invest in an adult ISA, so 16- and 17-year-olds can no longer open an adult cash ISA alongside their Junior ISAs.
Early access and death
The only early-withdrawal route during the child's lifetime is terminal illness, which HMRC defines as a progressive condition where the child is not expected to live more than six months. The registered contact applies to HMRC using the terminal illness early access form. If a child dies, the Junior ISA balance passes to whoever inherits the child's estate. That is usually a parent, but it could be a spouse or civil partner if the child was over 16 and married or in a civil partnership.
Inheritance tax and the 2027 ISA reforms
For inheritance tax, HMRC treats a parent's payment into a Junior ISA like any other gift. Each person has a £3,000 annual exemption, and regular payments made out of surplus income can be exempt without limit. Grandparents funding Junior ISAs each year often rely on one or both of these, and records showing the payments came from income make the executors' job easier later.
The ISA reforms in the Individual Savings Account (Amendment) (No. 2) Regulations 2026 (SI 2026/1018), made on 10 September 2026, come into force on 6 April 2027 and are aimed at adult ISAs. The overall adult allowance stays at £20,000, but anyone aged 64 or under at the end of the tax year will be limited to £12,000 a year in cash ISAs. The regulations do not change the £9,000 Junior ISA limit, and both the new rule stopping a stocks and shares ISA from holding only money market funds and the new flat-rate charge on interest paid on cash held in stocks and shares ISAs are disapplied for Junior ISAs.
Sources: GOV.UK: Junior Individual Savings Accounts; Individual Savings Account Regulations 1998, regulation 4ZB; HMRC: Junior ISAs for ISA managers; ITTOIA 2005, section 629; Individual Savings Account (Amendment) (No. 2) Regulations 2026; HMRC tax-free savings newsletter 23. For the wider picture, see our guides to gifting money to children and whether ISAs are subject to inheritance tax.
Acumon advises families on saving for children as part of private client tax work, including tracing and transferring old Child Trust Funds.