Struggling to find the perfect gift for children? Challenge the norm and consider a Junior Individual Savings Account (JISA) instead of cash or toys. Discover how JISAs can offer long-term, tax-efficient savings for your child's future, with contributions from family and friends, and how they can help teach the value of money and investing.
For too long, many parents, grandparents, aunts, uncles, and family friends have felt the dread that comes with buying gifts for children. Should we challenge the belief that giving cash as a gift is lazy? While it may not take as much thought as hunting down the latest bestselling toy, it could be much more valuable.
Instead, consider opening a Junior Individual Savings Account (JISA) for your children as an alternative gift. JISAs can only be opened by a parent, however, family members or friends can also contribute to an account set up by the parents.
JISAs are long-term, tax-efficient savings accounts for children, introduced in November 2011. They allow parents to set up an account to save for their children's futures until they turn 18, at which point the child can decide what to do with the savings.
Growth on savings and investments within a JISA is free of income tax and capital gains tax, making it a highly tax-efficient way to save for a child's future.
There are two types of JISAs:
A child can have one or both types of JISA, as long as the combined amount doesn't exceed the annual JISA limit.
This depends on individual circumstances:
Parents and legal guardians can open JISAs for children and control the account until the child turns 16. Anyone can contribute up to the annual allowance, making it easy for family members to add money as gifts.
You can have one Cash JISA and one Stocks and Shares JISA at a time. Many providers allow transfers between JISAs.
For the 2025-2026 tax year, the JISA savings limit is £9,000. This can be split between a Cash JISA and a Stocks and Shares JISA. Unused allowances don't roll over to the next year.
You can fund a JISA with regular instalments or lump sums, depending on what suits you. Providers set minimum amounts, but you can contribute more as long as you don't exceed the annual limit.
No, the money belongs to your child and can't be touched until they turn 18, except in cases of terminal illness or death.
At 16, your child takes control of the account but can't withdraw funds until 18. At 18, the JISA becomes an adult ISA, with an annual savings limit of £20,000. Your child can continue saving, transfer to another ISA, or withdraw the funds.
The amount depends on how much has been saved or invested. For example, if you save the full £9,000 annually from birth, your child could have £229,434* by 18, thanks to compound interest. Even smaller contributions, like £50 a month, can grow significantly over time.
CTFs were for children born between 1st September 2002 and 2nd January 2011. You can no longer open a CTF, but you can transfer existing ones to a JISA, depending on the provider. Consider the timing of the transfer, especially if your child is older.
Investing in your child's future could be a valuable gift, more so than any toy. A JISA can help teach children the value of money and the importance of long-term saving and investing. It could give them a head start for major expenses like buying a car, a home deposit, or education costs.
So, you could save yourself the trouble of wrapping presents and consider opening a JISA.
* All figures based on a 5% expected growth rate and 1.25% annual charges over 18 years.
This article is for information purposes only. It is not intended as investment advice.
Any views expressed are our in-house views as at the time of publishing.
The value of investments and the income from them can fall as well as rise and the investor may not get back the initial investment.
Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
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