What is a Junior ISA?
A Junior ISA (JISA) is a tax-free wrapper for under-18s, available as a Cash JISA or a Stocks and Shares JISA. The 2024-25 contribution limit is £9,000 per child per tax year, separate from the adult £20,000. A parent or guardian opens the account but the money legally belongs to the child. They take control at 16 and can withdraw at 18. Like adult ISAs, all growth and interest are outside UK income tax and CGT.
Pay £200 a month (£2,400 a year) into a Stocks and Shares JISA from birth to age 18. You have contributed £43,200. At ~7% long-run returns, the pot is around £82,000 at age 18, tax-free. The same money in a parent’s general account would have triggered the £100 parental settlement rule on interest, plus CGT on disposal above the £3,000 annual exemption.
Maxing the JISA before your own ISA and pension are full. The child takes control at 18 and can legally spend the lot on anything. Build your own tax shelter first, then add to theirs if you have room.
A 60-second lesson on this, with a worked drill, lives inside the Finlo app. Free, forever, on the basics.