What is a Junior ISA?
A junior ISA is a tax-free savings or investment account for a child under 18, opened by a parent or guardian. It has its own annual allowance, separate from the adult ISA limit. The child takes control of the account at 16 and can withdraw the money at 18.
It comes in cash and stocks and shares versions, and a child can hold one of each. Anyone can contribute — grandparents commonly do — but only a parent or guardian can open it.
The money belongs to the child and cannot be accessed by the parent, in any circumstances, before 18. Unlike a bare trust funded by a parent, the parental settlement rules do not apply, so income is not taxed back on the parent.
Child trust funds can be transferred in. Many matured accounts remain unclaimed by young adults who never knew they had one — worth checking. The obvious limitation is the same as a bare trust: at 18 the money is theirs, unconditionally.