Personal Finance

How to build a tax-free nest egg for your child: 1,000 children hold over £100,000 in a junior ISA

By Terry Tanaka 19 Jul, 2025
How to build a tax-free nest egg for your child: 1,000 children hold over £100,000 in a junior ISA
A tax-efficient strategy to increase your child's nest egg is through junior ISAs

We describe how they operate.

NFU Mutual submitted a Freedom of Information request to HMRC, stating that over 1,000 children have at least 100,000 in their junior ISA (JISA), with 50 sitting on 200,000 or more.

According to the data, some parents are taking full advantage of the annual tax wrapper to give their kids a head start on saving money for the 2022 - 2023 tax year.

Setting one up for your child could be worthwhile even if they aren't one of the top JISA holders.

According to research conducted earlier this year by Fidelity International, if you invest 55 points per month, you could give your child a 18,000 head start by the time they turn 18. This is based on a conservative yearly growth rate of 5%.

What is the process of a Junior ISA?

Parents can invest up to £9,000 annually in a junior ISA and avoid paying interest or return taxes.

The junior ISA allowance was 3,600 when they were first introduced in November 2011. This was raised to the current limit in 2020 after being progressively raised to 4,368 in 2019.

If a JISA has been set up for a child, the child can take control of the account at age 16, but they can't take money out of it until they're 18.

About 2 million junior ISA accounts are subscribed to in Britain, according to HMRC, with 42.2 percent of those accounts being in cash rather than stocks and shares.

The following table displays the highest junior ISA values for the 2022 - 2023 tax year.

HMRC is the source.

When adjusted for inflation, data indicates that junior stocks and shares ISAs have performed better than junior cash ISAs, yielding about 13,300 more over an 18-year period.

See our guide to the best junior stocks and shares ISA platforms for more information on where to open an ISA.

Junior ISAs: How do they operate?

A savings account that can be opened in a child's name by their parents or legal guardian is called a junior ISA.

Because you are exempt from paying taxes on interest or investment returns from funds held in a JISA, it is a better option than a traditional savings account.

A child may contribute up to £9,000 annually to a JISA on their behalf, and the funds are legally theirs. The child can manage the JISA account when they turn sixteen, but they can't take money out of it until they're eighteen.