How to Invest for Children: Junior ISAs and Junior SIPPs

Yes — you can invest for children in the UK, and the tax breaks are generous. The two main options are a Junior ISA, where you can invest up to £9,000 per child each tax year, and a Junior SIPP (a children's pension), where you can pay in £2,880 net a year and the government adds tax relief to make it £3,600.

Both are held in the child's name and grow free of UK income and capital gains tax. The key difference is when the child can get the money — 18 for a Junior ISA, retirement age for a Junior SIPP.

Here is how each works.

See how regular contributions could grow over a long time horizon:

---

Key Takeaways

• A Junior ISA lets you invest up to £9,000 per child each tax year, growing free of UK income and capital gains tax, with the money becoming the child's at 18.
• A Junior SIPP is a pension for a child: pay in £2,880 net and the government tops it up to £3,600, but the money is locked away until retirement age.
• A parent or guardian must open the account, though grandparents, relatives and friends can all pay in up to the annual limits.
• The long time horizon is the real advantage. Starting from birth gives 18 years (or decades, for a pension) for compounding to work.

---

Who can open an account for a child?

Only a parent or legal guardian can open a Junior ISA or Junior SIPP for a child. Once it is open, though, anyone can contribute — grandparents, aunts, uncles and family friends can all pay in, up to the annual limit for that account.

That makes these accounts a tidy way to pool birthday and Christmas money into something that grows.

Junior ISA: the flexible option

A Junior ISA (JISA) is a tax-free savings and investment account for under-18s. You can open one from birth and contribute up to £9,000 per tax year (for 2026/27). You can choose a cash Junior ISA or a stocks and shares Junior ISA — or split across both — but the £9,000 limit is shared across the two.

Tax and access

Everything inside a Junior ISA grows free of UK income tax and capital gains tax. The child takes control of the account at 16 but cannot withdraw until they turn 18, at which point it automatically becomes an adult ISA (with its own £20,000 allowance) and the money is legally theirs to use — for university, a first home, or anything else.

It is worth being comfortable with that: at 18, the decision is entirely theirs. For more on the wrapper itself, see our guide to your ISA allowance and our Junior ISA explainer.

Junior SIPP: a pension head start

A Junior SIPP is a self-invested personal pension for a child. You can contribute up to £2,880 net per tax year, and because pension contributions attract tax relief, the government adds £720, bringing the total to £3,600 a year — even though the child pays no tax themselves.

Tax and access

Like any pension, the investments grow largely free of tax, and that 20% government top-up is effectively free money. The trade-off is access: the funds are locked away until the normal minimum pension age (currently 55, rising to 57 from April 2028, and likely to rise further before today's children retire).

That is a very long time — but it is exactly why it is so powerful. A modest sum invested from birth has decades to compound.

Our explainer on pound cost averaging shows why a long horizon matters, and our plain-English pension guide explains how pensions work.

Junior ISA vs Junior SIPP: which should you choose?

Both are tax-efficient, so the decision comes down to when the child should get the money:

• Choose a Junior ISA if you want the money available for early-adult milestones like university or a first home. The flexibility is the draw, but remember the child controls it fully at 18.
• Choose a Junior SIPP if your goal is a genuine long-term head start and you are comfortable the money is untouchable until retirement. The tax relief and decades of compounding are unbeatable for that purpose.
• Many families do both — a Junior ISA for the near-ish future and a smaller Junior SIPP as a retirement gift.

Why the long time horizon matters

The single biggest advantage of investing for a child is time. An 18-year (or 50-year) horizon is ideal for riding out market ups and downs and letting compounding do the heavy lifting.

Many parents default to cash, but over such long periods investing has historically had a much better chance of beating inflation. You do not need to fund the full allowances to benefit — even small, regular contributions add up, especially with grandparents and relatives chipping in.

Alongside investing on their behalf, it is worth teaching good money habits early; our guide on raising financially smart children has plenty of fun ideas.

Frequently asked questions

Can a child have both a Junior ISA and a Junior SIPP?

Yes. A child can hold both at the same time, each with its own annual limit — £9,000 for the Junior ISA and £2,880 net (£3,600 gross) for the Junior SIPP. Many families use a Junior ISA for the near term and a Junior SIPP for a long-term pension head start.

Who can pay into a child's Junior ISA or SIPP?

A parent or guardian must open the account, but once it is set up anyone can contribute — grandparents, other relatives and family friends included — up to each account's annual limit. It is a popular way to turn gift money into long-term growth.

When can my child access the money?

With a Junior ISA the child takes control at 16 and can withdraw from 18, when it becomes an adult ISA. A Junior SIPP is locked until the normal minimum pension age (currently 55, rising to 57 from 2028 and likely higher for today's children).

Do children pay tax on investments in a Junior ISA or SIPP?

No. Both accounts grow free of UK income tax and capital gains tax. The Junior SIPP goes further by adding 20% government tax relief to contributions, even though the child is not a taxpayer.

General information only, not financial advice. Pension and tax rules change — check gov.uk or speak to a qualified, FCA-authorised adviser.

If you are saving towards fees rather than a lump sum at 18, see school fee planning.