A Junior Individual Savings Account (ISA) is a long-term, tax free savings account designed for children. Only those with parental responsibility for a child can set these up, but anyone over the age of 18 can contribute to them, up to the annual limit of £9,000 in 2022/23.
There are 2 types:
- a cash Junior ISA
– no tax to pay on the interest you earn
- a stocks & shares Junior ISA
– no tax payable on any capital growth or dividends
Those aged 16 or 17 can have a junior ISA AND an adult cash ISA or Help to Buy ISA. At 18, cash ISAs can be merged with ex-junior ISAs, if transfers in are accepted.
Anyone born between 1 September 2002 and 2 January 2011 had a Child Trust Fund automatically opened for them by the Government. Since April 2015, these can be converted into most junior ISAs, which offer better rates. (You cannot have a Junior ISA as well as a Child Trust Fund, if you want a Junior ISA, you will need to transfer the trust fund into it).