What's the difference between a Child Trust Fund and a Junior ISA?

What's the difference between a Child Trust Fund and a Junior ISA?

It’s normal to want the best for your kid’s financial future, which includes teaching them how and why to save money or invest for their future. The latest CBI Economics analysis shows why learning about saving money is so important. In the report, 40% of people who didn’t get any financial education as children say they can’t afford to save up as adults. This shows how teaching your kids about finances can help them learn how to save up all through their lives.


What are Junior ISAs?

ISA stands for Individual Savings Account, and a Junior ISA is an account that locks money away until your kid turns 18. There are two main types of Junior ISAs: a Stocks and Shares Junior ISA, and a Cash Junior ISA.

A Stocks and Shares Junior ISA means that the money added into the account will be invested in stocks, shares, bonds and other assets depending on the ISA  in which you invest. This means that the value of the ISA can fluctuate. The returns can be higher because there is a higher risk that you may lose money but this is not guaranteed.


On the other hand, a Cash Junior ISA will typically not lose value and is lower risk, but will offer more certainty in its returns than a Stocks and Shares Junior ISA.


You can open a Junior ISA for your child as long as you are their parent or guardian with parental responsibility. Once your teen is 16, they can open their own Cash ISA if they want to.


You can put up to £9,000 in a Junior ISA each year without paying tax on the interest or returns.

What are Child Trust Funds?

A Child Trust Fund is a type of savings account that parents or guardians could open for children born between 1st September 2002 and 2nd January 2011. A Child Trust Fund is very similar to a Junior ISA, and many people use a Junior ISA if they don't already have a Child Trust Fund for their child. This is because the Child Trust Fund scheme closed in 2011.


If you did open a Child Trust Fund before this date, you can put up to £9,000 into it yearly without having to pay tax on the interest. Once your child turns 18 they can access the Child Trust Fund and either withdraw the money or move the money into an adult ISA. Once they are 16, your teen can take over managing the Child Trust Fund.


What are the key differences between a Junior ISA and a Child Trust Fund?

While they seem very similar, there are some differences. When your child gets access to the money in the account at the age of 18, a Junior ISA will automatically become an adult ISA. However, a Child Trust Fund will pay out the total balance to the child. Your child can then decide to put this money into an adult ISA if they want.


If you have already set up a Child Trust Fund, you can transfer this balance into a Junior ISA. 


It is also important to remember that you can add £9000 to the account per year without tax on the income with both a Child Trust Fund and a Junior ISA. However, in a Child Trust Fund, the year starts and ends on your child’s birthday, while with a Junior ISA this yearly allowance is from the 6th April to the 5th April.

Can you have both a Child Trust Fund and a Junior ISA?

No, you cannot have both a Child Trust Fund and a Junior ISA simultaneously. If you want to change your child’s savings to a Junior ISA, you can transfer the money from the Child Trust Fund into the Junior ISA.

When does my child get access to their money?

With both the Child Trust Fund and a Junior ISA, your child would get access to their money once they turn 18. With a Junior ISA the account will automatically convert to an adult ISA, but your child will be able to withdraw the money if they want to. With a Child Trust Fund, your child will have to decide what to do with the money. 

Apply for a Junior ISA today with GoHenry

GoHenry provides a Junior ISA that you can open using the GoHenry app. Our Junior ISA is a Stocks and Shares Junior ISA that you can easily manage through your GoHenry app.


According to our Youth Economy Report, 71% of young people in the UK think it’s important to earn and manage their own money. Opening a Junior ISA for your child can be an excellent way to help them learn the importance of investing.


Capital in a Stocks & Shares Junior ISA is at risk; the value of your investment can go down as well as up. Tax treatment depends on your individual circumstances and may be subject to change.



For informational purposes only. 

The information provided is not intended to be investment, tax or legal advice - nor does it claim to be comprehensive. Speak to a professional, if you're unsure about whether investing is right for you. We do not endorse any third parties referenced.


Junior ISA rules and T&Cs apply. Investment services provided by gohenry Family Finance Limited, an Appointed Representative of Resolution Compliance Limited which is authorised and regulated by the Financial Conduct Authority: (FRN: 574048).  6958

Written by GoHenry Published Apr 12, 2022 ● 4 min read