Junior ISA 2026/27: Allowance, Tax and What Happens at 18

A Junior ISA (JISA) is a tax-free savings or investment account for a child under 18, with an annual allowance of £9,000 per child for 2026/27. Nothing inside it is taxed — no Income Tax on interest, no tax on dividends, no Capital Gains Tax — and the money is locked away until the child turns 18, at which point the account becomes theirs outright and automatically converts into an adult ISA.

Key points

• The junior ISA allowance is £9,000 per child, per tax year, shared across a cash JISA and a stocks and shares JISA.
• There is no junior ISA tax to pay or declare — not for the child, and not for the parent who funded it.
• Anyone can pay in, but only a parent or guardian with parental responsibility can open the account and act as "registered contact".
• At 18 the child gets full control and can withdraw the whole balance; you cannot restrict it.
• A JISA sidesteps the £100 rule that can tax a child's savings interest on the parent instead.

The junior ISA allowance for 2026/27

Each child has a single £9,000 allowance for the tax year running 6 April 2026 to 5 April 2027. It belongs to the child, not to the person paying in, so it does not matter whether the £9,000 comes from one parent, two parents, four grandparents or a mix.

Three rules catch people out:

• The allowance is shared. A child can hold one cash JISA and one stocks and shares JISA at the same time, but the £9,000 covers both together — for example £4,000 into cash and £5,000 into investments.
• It does not carry forward. Unused allowance is lost at midnight on 5 April. You cannot pay £18,000 in next year to make up for a missed year.
• Transfers are not subscriptions. Moving an existing JISA (or a Child Trust Fund) to a new provider does not use up any of the £9,000.

A child can hold either a Junior ISA or a Child Trust Fund, not both. If a CTF is still open, it has to be transferred into a JISA before you can subscribe to the JISA — and the CTF's own £9,000 limit applies until you do. If you have lost track of one, our guide on how to find a lost Child Trust Fund walks through the HMRC tracing service.

Cash vs stocks and shares

There are only two flavours of Junior ISA. There is no innovative finance or Lifetime version for under-18s.

Cash Junior ISA

Works like a savings account. Interest is credited gross and stays tax-free however large the balance grows. The capital cannot fall, but over a long period inflation can erode what it buys.

Stocks and shares Junior ISA

Holds funds, shares, bonds or investment trusts. Dividends and interest are tax-free and growth is free of Capital Gains Tax, so there is no need to track a gain against the £3,000 annual exempt amount or the £500 dividend allowance. The value can fall as well as rise.

Because the money cannot be touched until 18, a JISA opened in a child's early years has an unusually long time horizon — which is the main argument for taking investment risk. Here is an illustration of what a regular contribution can do:

• £200 a month paid in for 18 years = £43,200 contributed.
• At an assumed 5% a year, compounding monthly, the pot would be worth roughly £69,800.
• That is about £26,600 of growth, none of which is taxed on the way out.

That is arithmetic, not a forecast — actual returns are not guaranteed and charges reduce the result. You can model different contribution levels and rates with the ISA calculator.

Who can open one and who can pay in

Only a person with parental responsibility for the child can open a Junior ISA, and they become the registered contact — the one person the provider deals with. The child must be under 18 and resident in the UK (with limited exceptions for children of Crown servants).

Once the account exists, anyone can pay into it: grandparents, godparents, aunts, family friends. Money paid in is a gift to the child and cannot be taken back by the person who gave it. That is worth saying out loud to relatives before they transfer a large sum.

Two further points:

• At 16 the child can become the registered contact and manage the account themselves — change providers, switch investments, move money between their cash and stocks and shares JISA. They still cannot withdraw anything until 18.
• Withdrawals before 18 are effectively barred. The only exceptions are if the child dies, or is terminally ill and HMRC agrees to release the funds.

Inheritance Tax is the one tax that still applies

Paying into a JISA is a gift for Inheritance Tax purposes. It is not taxed inside the account, but the gift itself sits in the giver's estate for seven years unless it is covered by an exemption — the £3,000 annual gift exemption, small gifts of up to £250 per person, or gifts made as normal expenditure out of income. With a nil-rate band of £325,000 (plus up to £175,000 of residence nil-rate band) and a 40% rate above that, this matters mainly for grandparents making large or repeated gifts.

Junior ISA tax: what is and is not taxed

Inside the wrapper, nothing is taxed:

• Interest on a cash JISA is paid tax-free, with no need to use the child's Personal Savings Allowance or the £5,000 starting rate band for savings.
• Dividends and fund distributions are tax-free, regardless of the £500 dividend allowance.
• Gains on sale are free of Capital Gains Tax, so the £3,000 annual exempt amount stays untouched.
• Nothing goes on anyone's tax return. A JISA never triggers a Self Assessment requirement by itself.

It is fair to ask why this matters, given that children have the same £12,570 Personal Allowance as adults and very few earn anywhere near it. The answer is the anti-avoidance rule below.

Junior ISA vs the £100 rule

If a parent gives money to their own minor child and that gift produces more than £100 of gross income in a tax year, the whole of that income — not just the excess — is treated as the parent's income and taxed at the parent's marginal rate. The £100 is measured per parent, per child, per tax year. It is the reason an ordinary children's savings account funded by mum or dad can quietly create a tax bill for mum or dad.

Junior ISAs (and Child Trust Funds) are specifically outside this rule. So is money given by grandparents, other relatives or friends, which is never caught by the £100 rule in the first place.

Worked example

Two parents each want to put £5,000 aside for their daughter in an account paying 4%.

• Ordinary children's savings account. Each £5,000 earns £200 of interest. Each parent's gift has produced more than £100, so all £200 is taxed on that parent. A higher-rate parent (40%) pays £80; the other, a basic-rate taxpayer (20%), pays £40. Household tax: £120, and both parents technically need to report the interest.
• Junior ISA. The same £10,000 sits in the JISA (within the £9,000 annual limit across two tax years, or £9,000 now and the balance next April). Interest of £400 is tax-free. Household tax: £0, with nothing to report.

The saving compounds. Once the balance is large enough that interest comfortably exceeds £100 per parent, the £100 rule bites every single year outside a JISA.

Scotland: the rules on Junior ISAs and the £100 rule are UK-wide. Where a parent does get taxed on a child's interest, savings income is taxed using UK rates and bands even for Scottish taxpayers, so a Scottish intermediate-rate (21%) taxpayer would pay 20% on that interest, while a Scottish higher-rate (42%) taxpayer would pay 40%.

What happens to a junior ISA at 18

The run-up: ages 16 and 17

At 16 the child can take over management of the JISA. Historically 16 and 17-year-olds could also open an adult cash ISA in their own name, giving a combined allowance in those two years. That door was closed when the minimum age for an adult cash ISA rose to 18 for new accounts.

On the 18th birthday

Three things happen automatically:

• The account stops accepting JISA subscriptions and becomes an adult ISA — a cash JISA rolls into a cash ISA, a stocks and shares JISA into a stocks and shares ISA, usually with the same provider.
• The balance carried over does not use any of the £20,000 adult allowance. The new 18-year-old still has a fresh £20,000 for that tax year.
• The now-adult owner has full legal control. They can withdraw every penny and spend it, and no parent can block that. There is no mechanism to stage the payments or attach conditions.

If they do nothing, the money simply stays in a tax-free adult ISA. That is often the sensible default, but the interest rate or fund choice inherited from a children's product is worth checking, and from April 2027 the cash ISA subscription limit is due to fall to £12,000 a year for under-65s — so 2026/27 is the last full year of a £20,000 cash allowance for a young saver.

One practical tip: providers write to the registered contact and then to the child before the 18th birthday. If the address on file is out of date, a matured JISA can sit unclaimed for years, exactly as happened with millions of Child Trust Funds.

What to do next

Work out what regular or lump-sum contributions would build up to by the time the child turns 18, and how the same money would be taxed outside a wrapper, using the ISA calculator. If the child was born between 1 September 2002 and 2 January 2011, check whether there is a forgotten account to transfer first with our guide to finding a lost Child Trust Fund. The official rules and the current list of what counts as a qualifying investment are on GOV.UK's Junior ISA pages.