Opening a savings or investment account for your child is one of the best things you can do as a parent. But with all kinds of options out there, it’s not always obvious which one to pick.
First, Get the Right Guidance Early On
Before diving into specific accounts, it’s worth thinking about the bigger picture. Your income, tax position, risk appetite and timeline all shape which option makes the most sense. For families with more complex finances, or where larger sums are involved, working with a reputable wealth management service can help you weigh up how each vehicle fits your tax position, your timeline, and what you actually want the money to do. Getting that thinking clear at the start tends to matter more than the specific product you pick.
Now let’s zoom in and break down each option in detail, starting with the one most parents reach for first.
Junior ISAs
Junior ISAs (JISAs) are one of the most popular ways to save for a child. Any child under 18 who lives in the UK can have one, as long as they don’t already hold a Child Trust Fund, though a CTF can be transferred into a JISA if needed.
For the 2025/26 tax year, you can pay in up to £9,000, and this allowance has stayed the same for 2026/27. All growth and interest is completely tax-free, which makes them a strong option if you’re planning to save regularly over many years.
There are two types. A cash JISA works like a normal savings account. A stocks and shares JISA invests the money, which gives it more room to grow over the long term but also means the value can go up and down. You can split the allowance across one of each if you like.
The catch? Your child can’t touch the money until they turn 18, and then it’s theirs to do with as they please. That’s worth keeping in mind.
Child SIPPs
A child self-invested personal pension (SIPP) is a lesser-known option, but it’s one of the most tax-efficient tools available. You can pay in up to £2,880 a year, and the government adds basic rate tax relief that boosts the total to £3,600. In other words, every £80 you contribute becomes £100 inside the pension, an instant 25% uplift before any investment growth.
The trade-off is access. Your child won’t be able to touch the money until they reach the Normal Minimum Pension Age. That’s 55 at the moment, but it’s due to rise to 57 from April 2028, and it’s likely to keep climbing in future decades. That’s a very long lock-in, but the flip side is decades of compound growth. If you start when your child is born, even modest contributions can build into a significant pot by the time they retire.
Savings Accounts
A standard children’s savings account is the simplest route. Most banks and building societies offer them, and there’s no limit on how much you can deposit. Your child can usually access the money at 16 or even earlier, depending on the account.
The downside is tax. Children have their own personal allowance of £12,570, so most won’t pay tax on interest. But if gifts from one parent generate more than £100 of interest in a year (so £200 for a couple where both parents contribute), the whole lot, not just the amount over the threshold, gets taxed as that parent’s income. Gifts from grandparents or other family members don’t have this problem, which is a useful workaround.
Bare Trusts
A bare trust lets you hold investments or cash on behalf of your child. You manage the money as trustee, but your child is the legal owner and gains full control at 18.
Bare trusts are flexible. There’s no cap on contributions, and you can hold a wide range of assets inside them. But tax treatment mirrors savings accounts: the £100 rule applies to parental gifts, and any gains above the child’s own allowances could be taxable.
They’re most useful when larger sums are involved, or when grandparents want to gift money without the parental income rules kicking in.
Matching the Account to the Goal
There’s no single right answer. A JISA is great for tax-free growth with a medium-term horizon. A child SIPP is hard to beat for long-term compounding if you’re happy locking the money away. Savings accounts suit shorter-term goals or emergency pots. And bare trusts give you flexibility for bigger gifts.
Many families use a combination. What matters is starting early and reviewing your approach as circumstances change. Even small, regular contributions can make a real difference over 18 years.
The value of your investments and the income from them may go down as well as up, and you could get back less than you invested. Past performance should not be seen as an indication of future performance.
