Can a Grandparent Open a Junior ISA?

A Junior ISA (JISA) is a tax-free savings account for children under 18, designed to help them build financial security. Many grandparents want to contribute to their grandchildren’s future, but can they open a Junior ISA themselves?

This guide explains who can open a Junior ISA, how grandparents can contribute, the rules on contributions, and the impact on a child’s tax responsibilities.

Can Grandparents Open a Junior ISA for Their Grandchildren?

Grandparents cannot open a Junior ISA. Only a parent or legal guardian can open an account on behalf of a child. However, once a Junior ISA is open, anyone—including grandparents—can contribute to it.

If a child does not have a Junior ISA, a grandparent can encourage the parents to open one so they can start contributing.

Can Grandparents Make Contributions to a Junior ISA?

Grandparents can add money to an existing Junior ISA, helping their grandchild’s savings grow tax-free. Contributions can be made via:

• One-off payments

• Regular standing orders

• Birthday or Christmas gifts

All contributions go directly into the Junior ISA and cannot be accessed until the child turns 18.

How Can Grandparents Make Contributions to a Junior ISA?

Once the Junior ISA is open, grandparents can contribute by:

• Bank transfer using the Junior ISA provider’s payment details.

• Setting up a standing order for regular contributions.

• Writing a cheque payable to the Junior ISA provider (if accepted).

Each Junior ISA provider has different contribution methods, so it’s important to check their policies.

Can Grandparents Decide Where the Money in a Junior ISA is Invested?

Only the parent or legal guardian who opened the Junior ISA can decide how the money is invested.

If the Junior ISA is a Cash ISA, the money will earn interest tax-free. If it is a Stocks & Shares Junior ISA, the funds will be invested in shares, bonds, or funds, and their value can go up or down.

While grandparents cannot control investment choices, they can suggest options to the parents.

Can I Use an ISA to Save for My Grandchildren?

If a grandparent wants more control over savings, they can:

• Open a Cash ISA in their own name and gift the money to the child later.

• Use a Stocks & Shares ISA to invest and transfer funds when the child turns 18.

• Consider a bare trust, which allows savings to be held in the child’s name with more flexibility.

Can Contributions Exceed the Annual Limit If Multiple Family Members Contribute?

The Junior ISA limit for 2024/25 is £9,000 per child. This is the total amount that can be contributed by all family members combined.

If multiple family members are contributing, they should coordinate to avoid exceeding the limit. Any excess contributions will be returned by the provider.

Can Grandparents Top Up a Junior ISA If They Live Abroad?

Yes, but it depends on the Junior ISA provider’s policies. Some providers accept international transfers, while others only allow UK-based payments.

Grandparents living abroad should check with the provider and consider using a UK bank account for easier contributions.

Can Grandparents Set Up a Standing Order for a Junior ISA?

Yes, most Junior ISA providers allow standing orders, making it easy for grandparents to contribute regularly.

To set this up, grandparents need:

• The Junior ISA provider’s bank details.

• The child’s Junior ISA account reference (provided by the parents).

Standing orders can be weekly, monthly, or annually, depending on how frequently contributions are made.

Can Multiple Junior ISAs Be Opened for a Single Grandchild?

No, a child can only have one Cash Junior ISA and one Stocks & Shares Junior ISA at any time.

However, parents can switch Junior ISA providers if they find a better interest rate or investment opportunity.

Can Grandparents Access the Funds in a Junior ISA?

No, once money is contributed to a Junior ISA, it belongs to the child and cannot be withdrawn until they turn 18.

Only the child can access the money when the account matures, ensuring the savings are used for their future.

Can Junior ISAs Impact the Child’s Future Tax Responsibilities?

No, Junior ISAs do not affect the child’s personal tax allowance. When the child turns 18, the Junior ISA automatically converts into an adult ISA, and the funds remain tax-free.

However, if a grandparent gifts a large amount outside of a Junior ISA and passes away within seven years, the money could be subject to Inheritance Tax (IHT).

Can Grandparents Gift a Junior ISA Contribution in Their Will?

Yes, grandparents can leave money in their will to be used for a Junior ISA. However, once the grandchild turns 18, they can use the funds however they choose.

For larger gifts, setting up a trust fund alongside a Junior ISA can provide more control over how the money is used.

Final Thoughts

Grandparents cannot open a Junior ISA, but they can contribute to one and help their grandchildren build tax-free savings. Contributions are limited to £9,000 per year, and only the child can access the funds when they turn 18.

For more control over savings, grandparents may consider setting up a trust or investing in an ISA in their own name.

To contribute, check with the child’s parents and the Junior ISA provider’s payment options.