How grandparents can help fill a child’s Junior ISA

Birthdays and Christmas often bring the same question in many families: rather than another toy, could something go towards the child’s future? A Junior ISA answers it neatly. The account is in the child’s name, the money grows free of tax, and it cannot be spent until the child is 18. The only part that surprises people is who can do what.

How a Junior ISA works

GOV.UK describes Junior ISAs as long-term, tax-free savings accounts for children. A child must be under 18 and living in the UK, with a narrow exception for children of Crown servants abroad. There are two types, and a child can have one of each:

• a cash Junior ISA, where no tax is paid on the interest;
• a stocks and shares Junior ISA, where the money is invested and no tax is paid on growth or dividends.

A child cannot have a Junior ISA and a Child Trust Fund at the same time. Children who have a Child Trust Fund can have it transferred into a Junior ISA by asking the Junior ISA provider.

Who opens it, and who can pay in

This is the part that matters most for grandparents. According to GOV.UK, only parents or a guardian with parental responsibility can open a Junior ISA for a child under 16. The person who opens it becomes the “registered contact” and is the only one who can change the type of account, move it to another provider or report changes such as a new address.

Paying in is different. GOV.UK states plainly that anyone can pay money into a Junior ISA. A grandparent cannot open one, but once a parent has, the grandparent can usually contribute directly, for example by standing order or a one-off payment to the account details the provider gives. Providers set their own minimums and methods, so the simplest step is to ask the parent which provider holds the account.

The yearly limit covers everyone together

The limit for the 2026/27 tax year is £9,000. It is a limit per child, not per person paying in, and it covers both types of Junior ISA together. GOV.UK gives the example that if £2,000 goes into a child’s cash Junior ISA between 6 April 2026 and 5 April 2027, only £7,000 more can go into their stocks and shares Junior ISA in the same tax year. When several relatives contribute, it is worth agreeing who pays what, so that payments are not refused late in the tax year.

Invented family. The limit applies to the total across all the child’s Junior ISAs, whoever pays in.

Doing the sums

How small amounts add up. £50 a month from birth to 18 is £10,800 paid in. At an example 4% a year after charges, compounded monthly, it would grow to about £15,700. £100 a month (£21,600 paid in) would grow to about £31,400 on the same assumption. Returns are not guaranteed; a cash Junior ISA pays interest at a rate that can change, and a stocks and shares Junior ISA can fall as well as rise. Charges also matter over eighteen years, as our piece on fund charges shows.

Whose money it is

Money in a Junior ISA belongs to the child, whoever paid it in. It cannot be taken out until the child turns 18, apart from limited exceptions such as terminal illness. At 16 the child can become the registered contact and manage the account. At 18 the Junior ISA automatically becomes an adult ISA and the young person can take the money out, or leave it, as they choose. Neither the parents nor the grandparents can decide how it is spent from that point.

For some families that independence is the whole point. For others, it is a reason to talk to the child well before 18 about what the money is for.

Tax for the family

Interest and investment growth inside a Junior ISA are free of income tax and capital gains tax. There is also a useful point about the rules on children’s savings in general. GOV.UK explains that if money given by a parent earns a child more than £100 of interest in a tax year, the parent may have to pay tax on it. That £100 rule does not apply to money given by grandparents, relatives or friends, and it does not apply to money in a Junior ISA or Child Trust Fund.

For larger regular gifts, grandparents may also want to understand how gifts are treated for inheritance tax. HMRC publishes the rules on the annual exemption and on regular gifts out of income, and a solicitor or adviser can help where sums are significant.

Other ways to save for a grandchild

• A savings account in the grandparent’s own name, earmarked for the child, keeps control with the grandparent but is taxed as the grandparent’s savings.
• A children’s savings account opened by a parent, which allows withdrawals before 18.
• Premium Bonds or other National Savings products bought for a child under 16 by a parent, grandparent or guardian.
• A pension for the child, which a parent or guardian can open and which cannot normally be touched until later life.

Who this matters for, and what to check

This is for grandparents and other relatives who want to put money aside for a child under 18 living in the UK. The practical checks are: does the child already have a Junior ISA or Child Trust Fund, and with which provider? Is it cash or stocks and shares, and what does it cost? How much are others paying in this tax year? And are you comfortable that the child will control the money at 18?

The short version

Only a parent or guardian can open a Junior ISA, but anyone can pay in, up to £9,000 per child in total for 2026/27. The money grows tax-free, belongs to the child and becomes theirs at 18. For grandparents it is a simple, tax-efficient way to help, provided the family agrees who contributes what. For saving for yourself month by month, see how a regular savings account really pays.