“I should set up a savings account for the kids” is one of those things every parent says and half actually do. The options are genuinely confusing — Junior ISAs, Junior SIPPs, regular kids’ accounts, premium bonds, “friendly society” plans that are still being sold somehow.
Here’s what actually makes sense for a UK family in 2026, and why.
Best Junior ISA accounts
Cash or stocks & shares?
How much to save
Teaching kids about money
FAQ
The four real options for saving for your child
1. Junior ISA (JISA) — the default choice
Tax-free savings account in your child’s name. Contribute up to £9,000 per tax year (2025–26 limits, likely to stay similar). Child takes control at 16, can withdraw at 18. Two flavours: cash or stocks & shares.
This is the right choice for most families. Tax-free compound growth over 18 years is genuinely life-changing.
2. Junior SIPP (pension for kids)
A pension opened for your child. You can pay in up to £2,880 a year, which gets topped up to £3,600 by HMRC tax relief. They can’t access it until age 57 (probably 60 by the time today’s kids retire).
Niche but fascinating. £100/month from birth to 18 compounds, untouched, to potentially £500,000+ by retirement. The problem: you’re funding their retirement instead of their university deposit, first car, or first house. Only sensible if you’ve already maxed out their JISA.
3. Premium Bonds
Government-backed. No interest — you’re entered into a monthly prize draw with prizes from £25 to £1 million. Kids can hold up to £50,000 in Premium Bonds.
Nice as a birthday present from grandparents (a little bit of monthly excitement), not good as a main savings vehicle. Over time the prize-fund rate averages 4–5% but it’s not guaranteed and not compounding like an ISA would.
4. Regular children’s savings accounts
High-street banks (Nationwide, Halifax, Santander) offer “kids’ accounts” with small interest rates (typically 3–5%) and often a debit card at age 11+. Handy for teaching money management — not a serious long-term savings vehicle. Tax applies above a certain threshold.
Best Junior ISA providers in 2026
These shift year on year. At time of writing, well-reviewed options:
Best stocks & shares JISAs
- Vanguard Junior ISA — low fees (0.15%), brilliant range of low-cost index funds (LifeStrategy 80, FTSE Global All Cap). Best for hands-off investors.
- Fidelity Junior ISA — no platform fee for small amounts, great range of funds. Good alternative to Vanguard.
- Hargreaves Lansdown — pricier fees but the best platform and customer service if you want more control.
Best cash JISAs
- Coventry Building Society — regularly among the best rates.
- Nationwide — solid, reliable, good online access.
- Skipton Building Society — competitive rates, straightforward to manage.
Check moneyfactscompare.co.uk or MoneySavingExpert for current best buys — rates change regularly.
Cash or stocks & shares?
Over 18 years, stocks & shares historically beats cash by a huge margin. Historical UK stock market returns average 5–7% after inflation; cash ISAs generally track just above inflation.
£100/month for 18 years in a stocks & shares JISA at 6% average return compounds to ~£38,000. The same in cash at 3% compounds to ~£28,000. £10,000 more for the same input.
When cash makes sense: if the money is genuinely needed in the next 3–5 years (not 10+), the volatility of the stock market isn’t worth it. Cash is also fine if you’re contributing small amounts and stock swings will stress you out.
When stocks & shares make sense: a newborn or young child where you have 10+ years until they’ll access it. Pick a global index fund (Vanguard LifeStrategy or FTSE Global All Cap), keep it boring, don’t trade.
How much to save each month
There’s no right answer — save what you can without stressing the monthly budget. But here’s what the numbers look like:
| Monthly | 18 years @ 5% (cash) | 18 years @ 7% (stocks) |
|---|---|---|
| £25 | £8,800 | £11,500 |
| £50 | £17,600 | £23,000 |
| £100 | £35,200 | £46,000 |
| £200 | £70,400 | £92,000 |
Even £25 a month, started at birth, gives an 18-year-old nearly £10,000 toward their first home, uni costs, or first car. Not transformational, but meaningful.
Teaching kids about money (arguably more important)
A Junior ISA your 18-year-old can’t manage is less useful than a younger child who understands saving, budgeting, and delayed gratification.
- Age 4–7: a piggy bank, pocket money, basic “save vs spend.”
- Age 8–12: their own current account (Nationwide FlexOne, RBS Adapt). Let them make small financial decisions — and small mistakes.
- Age 13+: let them see and discuss household finances (age-appropriate). Involve them in setting the family holiday budget or gift-buying maths.
- Age 16+: they get control of their JISA at 16 (though can’t withdraw until 18). Show them what’s in it, explain how compound interest worked. This is the crucial conversation.
FAQ
Yes. Anyone can contribute, but only a parent or legal guardian can open one. Contributions all count toward the £9,000 annual limit regardless of who pays in. Grandparents who want to contribute larger amounts sometimes use Junior SIPPs or trusts instead.
On their 18th birthday, the JISA automatically converts to a standard adult ISA in their name. They can withdraw the full amount, reinvest it, or leave it. Legally, the money is theirs from 18. Which is why teaching them about money beforehand matters a lot.
No — but related. Child Trust Funds were opened for children born between 2002 and 2011 with government contributions. They’re being transferred into Junior ISAs over time. If your child has one you haven’t touched, check if it’s worth moving to a better-performing JISA.
In the child’s name via a Junior ISA — the growth is tax-free for 18 years. Saving in your own name is only better if you want to retain control (e.g. worried about the child taking a poor decision at 18), or if you want flexibility to use the money for family needs. Most parents choose JISA and accept the control trade-off.
No — money in a JISA can’t be accessed until the child turns 18. If you’re saving specifically for private school fees, you’d use an ISA in your own name or a dedicated school fees trust. Don’t use a JISA for near-term family expenses.
The bottom line
Open a Junior Stocks & Shares ISA at Vanguard or Fidelity, set up a standing order for what you can afford (even £25 a month is worth starting), pick a global index fund, and don’t touch it until they turn 18. Alongside that, teach them about money as they grow. The second part matters at least as much as the first.
