Free lesson · Lesson 25 in the app
What is a Junior ISA?
How a Junior ISA works, who can pay in, and what happens at 18.
About 8 minutes · 10-question quiz · Ages 10 and up
Learn
The government wants young people to get a head start with money, so it created the Junior ISA.
A Junior ISA (or JISA) is a savings or investment account for under-18s who live in the UK. The big attraction is that it's tax-free: whatever the money earns inside it stays in the account, with no tax taken off.
You met the Junior ISA briefly in Lesson 12. This lesson looks inside one of the best money tools young people have, to see how it works.
What makes a JISA special?
Tax-free: Normally the government can take a cut of what savings and investments earn. Inside a JISA, it can't.
A yearly limit: Up to £9,000 a year can go in (the 2026/27 limit; check the current one). The limit covers everything everyone pays in, added together.
Locked until 18: Nobody can take the money out before your 18th birthday. That sounds annoying, but it stops the money being spent early and gives it the most time to grow.
Yours at 18: On your 18th birthday it turns into a normal adult ISA, and the money is yours to use.
Two types of Junior ISA
There are two flavours, and you can have one of each.
Cash JISA: Works like a savings account. It earns interest, and the balance can't go down. Growth is steady but slower.
Stocks & Shares JISA: Invests the money, usually in funds that own lots of companies. It can grow more over time, but the balance goes up and down along the way.
Which fits depends on how long the money has before it's needed. Money with many years ahead has time to ride out the bumps, which is why many young people use Stocks & Shares. Lesson 27 compares the two properly.
Why tax-free matters
Outside an ISA, tax can start taking a slice of what your money earns once the pot gets big enough. And it can take that slice year after year.
Inside a Junior ISA, that never happens, however big the pot grows. No tax comes off the growth, so all of it stays in and goes on to earn growth of its own. It's compounding with nothing leaking out.
There's no tax when the money comes out, either. Whatever is there on your 18th birthday is all yours.
The longer money stays invested, the more this matters, and a JISA can hold money for up to 18 years.
Who does what?
- •Who can have one: anyone under 18 who lives in the UK (unless they have an older Child Trust Fund)
- •Who opens it: a parent or guardian, for under-16s. At 16 or 17 you can open one yourself.
- •Who can pay in: anyone at all, from parents and grandparents to aunts, uncles and family friends
- •Who's in charge: your parent or guardian runs it until you're 16. Then you can take control, but you still can't take money out until 18.
Lots of banks and investing websites and apps offer Junior ISAs. Not sure whether you have one? It's a good question to ask at home.
Starting early
Compound growth needs time, and a JISA gives it plenty.
Say a child gets £100 a month in a Stocks & Shares JISA from birth, and it grows by about 7% a year more than prices rise. Shares have done about that in the past, with no guarantee they'll keep doing it.
- •Paid in by 18: £21,600
- •Worth at 18: about £43,000
- •Growth: about £21,000, almost as much as everyone paid in
That could go towards university, a first car or a home one day. Or it could stay invested and keep growing for decades more.
Practice
No marks here. Have a think, or talk it through, then open a model answer.
The birthday money decision
You're 13, and your grandparents give you £100. You could:
A) Spend it on something you want now
B) Put it in a savings account you can use any time
C) Put it in your Stocks & Shares Junior ISA
Question: What does each option gain, and what does it give up?
Cash JISA vs Stocks & Shares JISA: what are the key differences?
The aunt's question
Your aunt asks: "Can I put money into little Jamie's Junior ISA, even though I'm not his parent?"
Question: What would you tell her?
Try the quiz
Pick an answer to see if it's right, and why.
Question 1 of 10
What is a Junior ISA?
Question 2 of 10
What does the Junior ISA yearly limit apply to?
Question 3 of 10
True or False: Only parents can put money into a Junior ISA.
Question 4 of 10
What are the two types of Junior ISA?
Question 5 of 10
When can the money in a Junior ISA be taken out?
Question 6 of 10
How does tax-free growth help?
Question 7 of 10
True or False: A Stocks & Shares JISA balance can go down as well as up.
Question 8 of 10
Who opens a Junior ISA for a child under 16?
Question 9 of 10
What is the youngest age at which a young person can take control of their own JISA?
Question 10 of 10
What happens to a Junior ISA when the child turns 18?
10 questions. Nothing is saved, so have a go.
Where a lesson mentions another lesson by number, the free ones are linked. The rest are in the app.
Keep going in the app
In Squids-In, children work through 160 short lessons like this one, in order, alongside a friendly investing game. You can see how they're getting on. It's free while we test it with a small group of families.