Junior ISAs and Child Trust Funds

Junior ISAs and Child Trust Funds are tax-free savings accounts designed to help children build up money for their future. Both schemes allow you to save up to £9,000 each year without paying any tax on the growth, and the money belongs to the child, who can access it when the...

Introduction

What are Child Trust Funds?

Child Trust Funds are long-term tax-free savings accounts for children born between 1 September 2002 and 2 January 2011. The scheme closed in 2011, so no new accounts can be opened. However, if your child already has a Child Trust Fund, you can continue adding money to it.

The money in a Child Trust Fund belongs to the child. They can take control of managing the account when they turn 16, but cannot withdraw any money until they're 18.

What are Junior ISAs?

Junior ISAs (Individual Savings Accounts) are long-term tax-free savings accounts for children under 18 who live in the UK. They replaced Child Trust Funds when that scheme closed in 2011.

There are two types of Junior ISA:

Cash Junior ISA - you won't pay tax on interest earned on the savings
Stocks and shares Junior ISA - your money is invested and you won't pay tax on any capital growth or dividends

Your child can have one of each type, or just one type if you prefer.

Who can open these accounts?

Only parents or guardians with parental responsibility can open a Junior ISA for children under 16. Children aged 16 and 17 can open their own Junior ISA.

You cannot have both a Child Trust Fund and a Junior ISA at the same time. If you want to open a Junior ISA for a child who has a Child Trust Fund, you'll need to ask the Junior ISA provider to transfer the trust fund into it.

Children living outside the UK

Your child can only get a Junior ISA if they live outside the UK and both of the following apply:

You're a Crown servant (for example, in the UK's armed forces, diplomatic service or overseas civil service)
They depend on you for care

If your child moves abroad after opening a Junior ISA, you can still add money to their account.

Annual contribution limits

In the 2026 to 2027 tax year, you can save up to £9,000 per year into a Junior ISA or Child Trust Fund. This limit applies across both types of account combined.

For example, if your child has £2,000 paid into their cash Junior ISA between 6 April 2026 and 5 April 2027, only £7,000 could be paid into their stocks and shares Junior ISA in the same tax year.

For Child Trust Funds, the year runs from the child's birthday to the day before their next birthday. If you don't use the full £9,000 limit, you cannot carry any unused amount over to the following year.

Who can pay money in?

Anyone can pay money into a Junior ISA or Child Trust Fund - not just parents. This means grandparents, other relatives, and friends can all contribute, as long as the total from all sources doesn't exceed £9,000 in a year.

Government payments don't count towards the £9,000 limit, except for payments made by a local council to a child in care.

Tax benefits

There's no tax to pay on the income or any profit made in a Junior ISA or Child Trust Fund. This makes them significantly more tax-efficient than ordinary savings accounts.

The accounts will not affect any benefits you receive.

Money given by grandparents, relatives or friends and held in these accounts doesn't count towards the £100 limit that would otherwise trigger a tax charge on a parent.

Managing the accounts

The person who opens a Junior ISA or manages a Child Trust Fund is called the 'registered contact'. As the registered contact, you're the only person who can:

Tell the account provider how to invest the fund and run the account
Change personal details like the address
Change the type of account (for example, from cash to stocks and shares)
Move the account to another provider

Contact your account provider to make any of these changes.

When your child turns 16

Once your child reaches 16, they can either:

Take over managing the account by contacting the provider
Leave you in charge of the account

Even if they take control at 16, they still cannot withdraw any money until they turn 18.

Children aged 16 and 17 can also open their own Junior ISA if they don't already have one.

Accessing the money at age 18

When your child turns 18, Junior ISAs automatically convert into an adult ISA. At this point, they can:

Withdraw the money
Leave it invested in the adult ISA
Transfer it to a different adult ISA provider

For Child Trust Funds, when your child reaches 18, the account matures. This means:

Your child automatically takes over the account
No more money can be added

They can then either take out the money or transfer it to an adult ISA. The Child Trust Fund will close once the money is withdrawn or transferred.

Until your child withdraws or transfers the money, it stays in an account that no one else has access to.

Special circumstances: terminal illness

If your child is terminally ill (meaning they have a disease or illness that is expected to result in death within 6 months), the registered contact can take money out of a Junior ISA early.

The time limits for accessing the money vary by location:

England or Wales: 6 months from the date of diagnosis
Northern Ireland: 12 months from the date of diagnosis
Scotland: no time limit

You'll need to fill in a terminal illness early access form to let HMRC know about your child's condition and your intention to withdraw money.

If your child lacks mental capacity at 18

If your child lacks the mental capacity to manage their account when they turn 18, you or a close friend or relative need to apply to the Court of Protection for a financial deputyship order. This allows you to manage your child's account or take out money on their behalf.

In Scotland, applications should be made to the Office of the Public Guardian in Scotland. In Northern Ireland, applications go to the Office of Care and Protection.

If your child dies

If your child dies, any money in their Junior ISA or Child Trust Fund will be paid to whoever inherits their estate. This is usually one of the child's parents, but could be their spouse or partner if they were over 16 and married or in a civil partnership.

You don't need to contact HMRC, but you'll need to tell your account provider so they can close the account. They may need proof, such as a copy of the death certificate.

Finding a lost Child Trust Fund

If you don't know which provider holds your child's Child Trust Fund, you can ask HMRC to find it for free. You can do this if you're:

16 or over and looking for your own trust fund
A parent or guardian of a child under 18

HMRC will send you a letter with details of the provider, usually within 3 weeks of receiving your online request. Postal applications take longer.

You'll need your National Insurance number and, if you're a parent or guardian, the child's full name, address and date of birth.

Sources

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.