Investing for children: Junior ISAs, Junior SIPPs and bare trusts

Investing for a child usually means one of three things: a Junior ISA, a Junior SIPP (a pension started on the child's behalf), or a simpler account held for the child such as a bare trust or an investment account in the child's name. The three differ mainly in two things: how much can go in, and when the child can get the money out.

A Junior ISA takes up to £9,000 a year, tax-free, and the money belongs to the child outright but cannot be touched by anyone until they turn 18¹. A Junior SIPP takes up to £2,880 a year from you, which the government tops up with £720 of tax relief to £3,600, but the child cannot normally touch it until age 55, rising to 57 in 2028². A bare trust or similar account is more flexible for the giver but has fewer tax advantages and different rules about who controls the money⁴.

There is also a fourth possibility that many families do not know about: a Child Trust Fund, a government-created account for children born between 1 September 2002 and 2 January 2011. Around 2.9 million of these were still open as of 5 April 2026, and many have never been claimed⁵.

The main ways to invest for a child

The main routes are the Junior ISA, the Junior SIPP, and accounts held for the child outside those wrappers. What separates them is control and access.

A Junior ISA is a tax-free savings or investment account for a child under 18. It was created by regulations in 2011 to provide "tax efficient individual investment plans for children"¹⁰. A parent or guardian opens and manages it while the child is under 16, and the child can take over management at 16¹. Nobody can withdraw the money until the child turns 18⁷.

A Junior SIPP is a pension. Anyone can pay into it, the government adds tax relief, and the child takes control at 18 but cannot normally draw the money until 55, rising to 57 in 2028². It is the longest lock-up of the three by far.

Outside those wrappers, a parent, grandparent or other adult can hold money or investments for a child in a bare trust or a children's investment account. NS&I, for example, offers an Investment Account that children under 16 can hold alongside Premium Bonds and a Junior ISA¹¹. Grandparents can open and pay into that Investment Account themselves, but they must nominate a parent or guardian to look after it until the child turns 16⁴. A bare trust arrangement like this gives the adult more flexibility over when money is used, but it does not carry the ISA's tax-free status, and gifts into it are permanent: as Which? puts it, "It's permanent: there's no going back"¹³.

Which route suits a family depends on what the money is for. Money intended to help an 18-year-old with education, a first car or a deposit fits a Junior ISA. Money intended to give a child a head start on retirement saving, which nobody can touch for decades, fits a Junior SIPP. Money a family wants to keep some control over, or use before 18, fits a bare trust or children's account, at the cost of the tax wrappers. The pages on how investing works and where to hold investments explain the underlying choices that apply to all of these.

Junior ISA: up to £9,000 a year, tax-free

A Junior ISA lets you invest up to £9,000 a year for a child under 18, and all growth and income inside it is free of UK tax¹. The limit is per child, not per person: it covers everything paid in by parents, grandparents, friends and the child themselves combined. Payments can start from as little as £1⁹.

The £9,000 figure has not always been the limit. It was £4,128 before 6 April 2018, when it rose to £4,260¹⁴. The current £9,000 level has been in place for several years and applies to the 2026/27 tax year⁹.

The allowance is separate from every adult's own ISA allowance. Paying into a child's Junior ISA uses none of yours, and the child's Junior ISA money does not count against anything else they hold. When the child turns 18, the Junior ISA automatically becomes an adult ISA, with the adult rules and the adult allowance applying from then on⁷.

Junior ISAs are widely used. In 2024 to 2025, £2.5 billion was subscribed to Junior ISAs across around 1.6 million accounts, and the average subscription was £1,570, an increase of 16.6% on the previous year⁵. Around 38.3% of that money went into cash Junior ISAs, with the rest in stocks and shares⁵.

Cash or stocks and shares Junior ISA: how each one works

A child can hold one cash Junior ISA and one stocks and shares Junior ISA at the same time, and no more than one of each⁸. The £9,000 annual limit is shared between them in any proportion: a single payment can go to a cash account, a stocks and shares account, or be split between them¹⁵.

A cash Junior ISA works like a savings account: it pays interest, the balance does not fall, and the money is tax-free. It suits money where certainty matters more than growth.

A stocks and shares Junior ISA holds investments such as funds, shares and bonds. The value can rise or fall, and in extreme circumstances an investor could lose all their money¹⁶, but over long periods stock market investing has historically produced higher returns than cash, which is why many families use a Junior ISA's 18-year lock-up to invest rather than save. The basics of investment funds, investment risk and diversification apply inside a Junior ISA exactly as they do in an adult account.

Money can be moved between the two types. The regulations allow previous years' subscriptions to be transferred from a stocks and shares Junior ISA to a cash Junior ISA for the same child, in whole or in part; if current-year money is being transferred, all of the current year's subscriptions must move together¹⁷. Transfers in the other direction, to a stocks and shares account, must be of all the subscriptions held¹⁷.

Who can open a Junior ISA and who can pay in

A Junior ISA can only be opened and managed by the child's parent or legal guardian⁴. That is the key restriction, and it is the one that catches grandparents out: a grandparent cannot open a Junior ISA for a grandchild.

Once the account exists, anyone can pay into it. Parents, grandparents, other relatives, friends and the child themselves can all contribute, subject only to the shared £9,000 limit. This makes the Junior ISA a common route for birthday and Christmas money from the wider family.

There are two exceptions to the parent-or-guardian rule on opening. First, a 16 or 17 year old can open a stocks and shares Junior ISA themselves: the ISA regulations permit the management agreement to have effect as though the child was 18¹⁸. Second, a child aged 16 or over can become the registered contact for their own Junior ISAs, taking over management from the parent⁷.

The registered contact is the person who runs the account while the child is under 16. The registered contact is the only person who can change the account (for example from cash to stocks and shares), change the account provider, and report changes of circumstances such as a change of address⁷.

For grandparents who want an account they control themselves, the alternative is a children's investment account outside the ISA rules. NS&I's Investment Account, for example, can be opened and funded by grandparents, provided a parent or guardian is nominated to look after it until the child turns 16⁴. Premium Bonds can also be bought for someone else's child, with the parent or guardian looking after the holding until the child turns 16¹⁹.

Junior SIPP: £2,880 a year becomes £3,600 with tax relief

A Junior SIPP is a personal pension opened on a child's behalf. Up to £2,880 can be paid into it each year, and the government adds tax relief of £720, bringing the total to £3,600³. The relief is added even though the child pays no tax, because pension tax relief works on the contribution, not on the contributor's tax bill.

Anyone can pay into a Junior SIPP: parents, grandparents and others. interactive investor, which offers one, notes that a child's pension can be boosted by regular contributions from family members². The £2,880 figure is the net contribution; the £3,600 gross figure is the effective ceiling on what can go in each year through this route³.

The long lock-up is what makes the sums work. interactive investor gives an example: assuming £2,880 invested each year from birth with a 4% return each year, by the time the child is 18 they would already have £92,323.49 towards their retirement savings². That figure is a projection, not a promise: actual returns depend on the investments chosen and can be lower, and the value can fall as well as rise.

A Junior SIPP is a defined contribution pension, so the money is invested and its eventual value depends on investment performance. The child takes control of the account at 18, but the money itself stays locked in². The pensions section explains how defined contribution pensions work at the other end, when the child eventually reaches retirement.

A Junior SIPP is locked until 55, rising to 57

The defining feature of a Junior SIPP is the access age. The child cannot access the money until they reach age 55, rising to 57 in 2028³. Chip's guidance on private pensions states the same rule: withdrawals are not normally possible until 55, rising to 57 from 2028³.

This is the trade-off at the heart of the choice between a Junior ISA and a Junior SIPP. The Junior ISA gives the child everything at 18, when they may or may not be ready to manage it. The Junior SIPP gives them nothing until their mid-fifties, by which time decades of investment growth and further contributions will have compounded on top. A family can, of course, use both: £9,000 a year into a Junior ISA and £2,880 a year into a Junior SIPP are separate allowances.

The rising access age is worth noting for anyone contributing today. The money committed to a Junior SIPP now is committed for decades, and several providers point out that the minimum access age is likely to rise further by the time today's children reach retirement. The current legislated position is 55, rising to 57 in 2028³.

What happens at 16 and 18

Ages 16 and 18 are the two turning points in every child investment account, and what happens differs by account type.

At 16, for a Junior ISA, the child can choose to manage their own account and become the registered contact, though a parent can continue in that role if the child prefers¹. For a Child Trust Fund, the child takes control of the account at 16, but cannot take out any money until 18⁶. For NS&I's Investment Account and Premium Bonds held for a child, the parent or guardian's responsibility ends when the child turns 16⁴.

At 18, a Junior ISA automatically becomes an adult ISA in the child's name, and the child can take out any money in it⁷. A Child Trust Fund matures: the account holder, and only the account holder, can instruct what happens to it, including transferring it to any type of ISA with any provider¹⁸. A Junior SIPP passes to the child's control, but the money stays locked until the access age².

Two tax points attach to the 18th birthday. For capital gains tax on a Child Trust Fund, the named child is treated as having sold all the account investments and reacquired them at market value immediately before turning 18²². This resets the capital gains base cost, so gains that built up inside the account before 18 are not taxed when the child later sells.

If a child lacks the mental capacity to manage their account as an adult, a court process is needed. In England and Wales, a close friend or relative applies to the Court of Protection for a financial deputyship order; in Scotland, applications go to the Office of the Public Guardian in Scotland; in Northern Ireland, to the Office of Care and Protection⁷.

Child Trust Funds: finding one and moving it to a Junior ISA

A Child Trust Fund is a tax-free savings account created by the government for children born between 1 September 2002 and 2 January 2011⁶. Each eligible child, living in the UK and not subject to immigration control, received an initial government deposit of at least £250⁶. If a parent or guardian did not set one up, the government automatically opened one anyway⁶, so an account may exist even in families with no memory of it.

Many have never been found. As of 5 April 2026 there were around 2.9 million open Child Trust Fund accounts, of which around 827,000 were matured accounts still sitting there as CTFs⁵. Between September 2020 and April 2026, around 3,784,000 accounts matured in total, of which around 2,958,000 were claimed or automatically transferred to an ISA⁵. The average market value of a CTF in April 2026 was £2,642⁵.

To find one, use the free Child Trust Fund finder tool on GOV.UK⁶. Which? describes the finder tool as the way to see where an account is held²³. Young people aged 16 to 18 can also contact MoneyHelper for information about their accounts²⁵.

A child cannot have a Child Trust Fund and a Junior ISA of any type at the same time⁹. To move from one to the other, the whole Child Trust Fund amount must be transferred into the Junior ISA²⁶. The government consulted on allowing these transfers in 2013, and the consultation concluded with the rules that now permit them²⁷.

Moving a child's account to another provider

Transfers between providers are how money moves between Child Trust Funds and Junior ISAs, and between Junior ISA providers, without losing the tax-free status.

For an under-18 Child Trust Fund, the options are: leave the money with the current provider, transfer to a different CTF provider, or move it into a Junior ISA²³. Once money has moved into a Junior ISA it cannot go back to a Child Trust Fund later²³.

For Junior ISAs, transfers can be made between cash and stocks and shares accounts and between providers, as described above, with the rules on partial and whole transfers set out in the ISA regulations¹⁷. The registered contact is the only person who can change the account provider while the child is under 16⁷.

One cost to check before moving a Child Trust Fund: some CTF money is invested in with-profits funds, and the FCA warns that such funds may pay an extra payment after a certain date, typically called a terminal bonus, which could be lost on transfer²⁹. A family moving a CTF shortly before such a date should ask the provider what would be given up. The legislation also provides for regulations requiring a provider to transfer all the investments under a Child Trust Fund to a protected account at 18³⁰, which is how matured accounts are handled where the holder does not act.

Risks and benefits

The benefits of investing for a child are long horizons and tax wrappers. Eighteen years or more of growth inside a Junior ISA, or decades inside a Junior SIPP, is longer than most adults can invest for themselves, and the tax-free treatment means no income tax or capital gains tax on the way.

The risks fall into three groups.

First, investment risk. A stocks and shares Junior ISA or Junior SIPP can fall in value, and in extreme circumstances an investor could lose all their money¹⁶. The investment risk page explains how to think about this. A long horizon helps, but it does not remove the risk.

Second, access risk. Junior ISA money cannot be withdrawn by anyone before the child turns 18⁷. If the family's circumstances change and the money is needed, it is not there. Money that might be needed for the child before 18 is better held in an account without the lock.

Third, control risk. The money belongs to the child. At 18, a Junior ISA becomes theirs to spend as they wish, and no parent can impose conditions⁷. A Junior SIPP avoids this by locking the money until 55 or 57, but that is a very long commitment. A bare trust or children's account keeps more control with the adults, but a gift is permanent and the giver loses their own financial security, choice and control over the money¹³. Which? also notes that the recipient's divorce or bankruptcy could affect assets given to them, and that capital gains tax may apply on a profit when an asset is transferred¹³.

If a child dies or is terminally ill

The rule that no one can withdraw Junior ISA money before 18 has two exceptions: if the child dies, or if the child has a terminal illness⁹.

If a child dies before 18, the money in their Junior ISA is paid to whoever inherits their estate. The ISA inheritance rules that can preserve a deceased adult's ISA for a surviving spouse do not apply in the ordinary way, because the child's money forms part of their estate; however, if the child was over 16 and married, which is possible in Scotland and Northern Ireland, the money would go to their spouse and the ISA inheritance rules stand¹⁶.

For a terminally ill child, the account provider can release the money early. NS&I's Junior ISA terms state that withdrawals are possible where the child dies or has a terminal illness⁹.

Separately, families caring for a terminally ill child may be entitled to disability benefits at the highest rates. Under Child Disability Payment in Scotland, a child with a progressive, terminal illness qualifies automatically for the highest rates of both the care and mobility components, and there is no need to show that the child is expected to die within six months: a nurse or GP must believe the child has a progressive disease that can reasonably be expected to cause their death³¹. The benefits section covers these payments in more detail.

Where to get free help

Free, impartial help is available for all of this. MoneyHelper, the government-backed money guidance service, is the place to start for questions about Child Trust Funds, Junior ISAs and children's accounts generally, and is specifically recommended for 16 to 18 year olds trying to trace a CTF²⁵. The GOV.UK Child Trust Fund finder tool is free to use⁶. For complaints about a provider, the Financial Ombudsman Service is the free route after the provider's own complaints process. For questions about how a gift or trust interacts with inheritance tax, HMRC's guidance on reporting inheritance tax on a gift or trust sets out what must be told to them.