Maximise Your Child’s Junior ISA: A Parent's Guide to Saving

Have you previously opened a Junior ISA (JISA)* for your child? Or are you considering transferring their Child Trust Fund to a JISA?

In this helpful guide, we look at the benefits of this popular children's tax efficient savings account. We also discuss how to make the most of the £9,000 yearly Junior ISA allowance (2024/2025 tax year).

Who can open a JISA?

Grandparents often ask this question, but only a child's parent or legal guardian can open a Junior ISA. Additionally, the child must be under 18 and a UK resident to qualify for this account.

However, grandparents and other family members are more than welcome to contribute to a Junior ISA once it’s open.

Can I open a Junior ISA if my child already has a Child Trust Fund?

A child cannot have both a Child Trust Fund and a JISA at the same time. However, you do have the option to transfer the funds from their Child Trust Fund into a Junior ISA.

Once the transfer is complete, the Child Trust Fund will be closed, and all future savings will go into the JISA instead.

To find out more about how to transfer a Child Trust Fund to a Unity Mutual Junior ISA, use our helpful step-by-step ‘Transfer to us’ guide.

Choosing a Junior ISA - Cash vs. Stocks and Shares ISA

When choosing a Junior ISA (JISA), it's important to know that there are two types available: Cash and Stocks and Shares. Each comes with its own benefits and risks.

Cash Junior ISA:

Working like a regular savings account, the Cash ISA earns interest, rather than be subjected to fluctuations in the stock market.
The downside is that returns may be lower with a Junior Cash ISA. This is especially true if your child’s accounts interest rate does not keep up with inflation. This is important to think about if you are opening it during your child's early years.

Stocks & Shares Junior ISA:

Investing in the stock market, this ISA offers the potential for higher long-term growth and the possibility of outperforming inflation.
This investment aims to increase value over the mid to long term. However, the returns depend on how well the Fund performs, which is unpredictable.
With a Junior Stocks and Shares, investments can fluctuate in value. This means your savings are at risk, because the amount saved could go down as well as up.

With both a Cash Junior ISA and a Stocks and Shares Junior ISA, you lock in your savings until the child turns 18. This removes the temptation of dipping into the savings pot and spending it. That said, you do have the ability to transfer a Junior ISA between different providers to try and maximise growth.

Did you also know, you can split the JISA allowance between the two types of Junior ISA – a cash one and a stocks and shares one? This may well be a good way to maximise the £9,000 ISA allowance, and getting the benefits of both.

The Power of Early Saving: How to Maximise Your Child’s Junior ISA

The key to making the most of your child’s £9,000 Junior ISA allowance each tax year is simple - start early. Even small, consistent contributions can grow significantly over time, creating a strong financial foundation for their future.

Setting up a Direct Debit can make saving effortless, ensuring regular contributions without the temptation to spend the money elsewhere.
If you’re unsure how much to save, try our Junior ISA Savings Calculator - just enter an initial investment, monthly contributions, and your child's age to see how early saving can make a real difference.
Involve your child in the process - Explain how you are maximising their allowance, helping to instil valuable financial habits for life.

Of course, the rising cost of living means it's essential to balance saving with your own financial needs. Setting a healthy savings goal is important, but it shouldn't leave you stretched too thin.

Encouraging Family and Friends to Pay into the JISA

Choosing the perfect gift for a child can be hard, especially if you’re a relative who doesn’t see them regularly. So, why not suggest a more meaningful alternative, contributing to a child's Junior ISA?

This not only helps maximise the £9,000 annual JISA allowance but also provides a lasting financial benefit for their future. Here are some pros of the JISA:

Anyone can contribute—via monthly Direct Debit or a one-off payment with a debit card or internet banking.
There’s no need for unnecessary toys or clothes. Instead, why not opt for a gift that grows in value?

Danielle set up a Junior ISA for her child. She said:

“Me and my husband wanted to save for our daughter’s future, and a Junior ISA made it so simple. It’s easy to keep track of, and the best part is that all the family can pay in if they want to, helping us grow her savings pot over time.”

Thinking of setting up a Junior ISA on behalf of your child?

Ready to start saving? Find out more about the Unity Mutual Stocks and Shares Junior ISA*. Don't miss out, act before 5 April deadline to make the most of this year’s allowance.

If you have any questions about Junior ISAs or other children's savings accounts, our friendly team is here to help – just call us on 0161 214 4650.

Plus, thanks to our partnership with Mini First Aid, you can sign up to attend a free paediatric first aid course when you open a Junior ISA. It’s our way of helping you plan for your child’s future in more ways than one.

*Terms and conditions apply. Capital at risk.