What is the Junior ISA Allowance for the 2024/25 Tax Year?

The Junior ISA allowance renewed on 6th April 2024 at the start of the current financial year. This may have raised questions about your child’s Junior ISA limit and how this impacts saving for your children; so we’ve broken down all you’ll need to know about your little one’s Junior ISA allowance in the 2024/25 financial year.

Junior ISA Annual Allowance at a Glance

What is a Junior ISA allowance?

A Junior ISA allowance is the total amount you can save or invest tax-efficiently into your child’s Junior ISA each financial year. This means you won’t pay any income tax or capital gains tax on any returns or interest. Your Junior ISA allowance, along with any additional investments, has the potential to change each year, which is why it’s important to keep up to date with the current year’s allowance.

What is the Junior ISA annual allowance in 2024/25?

The current Junior ISA annual allowance for the 2024/25 financial year is £9,000. This amount is reviewed and set by the government each year, so could potentially change in the future.

Your child’s annual allowance can be invested in a single Junior ISA such as a stocks and shares Junior ISA, or spread across other types of Junior ISAs such as a cash Junior ISA.

If you’re looking to save or invest for yourself rather than a child, then you can invest into an adult Stocks and Shares ISA, which has a different annual allowance of £20,000. To learn more visit our guide on the Stocks and Shares ISA allowance.

When does the Junior ISA allowance get renewed?

The Junior ISA allowance is renewed every year on 6th April. This allowance doesn’t roll over, so if you haven’t used all of your allowance in one financial year, then any unused allowance won’t be able to be used in the future. The allowance is renewed each year by the government. However, it has remained unchanged since 2020 when it was increased from £4,368 to £9,000.

Historical Junior ISA allowances

Junior ISAs were first introduced in 2011 with a limit of £3,600. 

The allowance steadily increased each year to £4,368 by the 2019/2020 tax year, before jumping up to the current junior ISA limit of £9,000 in April 2020. The Government reviews the allowance each year, so it could change in the future. 

How can you use the Junior ISA allowance?

You can use your child’s Junior ISA allowance by investing into a stocks and shares Junior ISA, or saving into a cash Junior ISA. Alternatively,  you can also choose to put money into both types of Junior ISA in the same tax year, as long as you do not exceed the overall junior ISA limit of £9,000.

For example, you can invest £6,000 in a stocks and shares Junior ISA and £3,000 in a cash Junior ISA in the same financial year tax-efficiently, without exceeding the total limit of £9,000.

What happens if you exceed the Junior ISA limit?

It’s important you’re aware of the Junior ISA allowance each tax year, so you can avoid exceeding the annual tax-free limit.

Junior ISAs work as tax wrappers, meaning they act to shield your money from tax. Any returns you receive on your money and withdrawals are safe from the taxman as long as your annual contributions stay within the Junior ISA limit. For the 2024-25 tax year, this limit is £9,000. You won’t receive any tax relief on anything extra you deposit beyond the £9,000 allowance.

If you have Junior ISAs with more than one provider, then this can be harder to keep track of. So, be sure to regularly monitor how much is in each of your child’s Junior ISAs. You may find it is easier to avoid exceeding the limit by transferring all your child’s Junior ISAs to one provider.

If you do exceed the limit, the best thing to do is contact HMRC by calling their helpline on 0300 200 3300 and explaining your situation. They will help you work out which payment breached the limit and reclaim the money for you. There may be a charge for any tax due. If you don’t let them know, HMRC will get in touch to let you know how to correct your mistake at the end of the tax year.

Are there any Junior ISA rules I should know?

Yes, when opening a Junior ISA it’s important to remember that there are a few rules you need to follow.

• Your child must be aged under 18 and a UK resident.
• You are able to save or invest tax-efficiently up to the annual allowance of £9,000.
• Any unused allowance can’t be rolled over to the next financial year.
• Only a parent or guardian can open a Junior ISA for their child, but anyone such as a family member, including grandparents, or friends can contribute towards their annual allowance.
• Your child won’t be able to access these funds until they turn 18 years old.
• Your child will have the option to manage their Junior ISA themselves once they turn 16 years old.
• You can invest in one cash Junior ISA and one stocks and shares Junior ISA each financial year as long as you don’t exceed your child’s overall annual allowance.

Be sure to read through our Important Information Guides for all the key information about our Junior ISA. Remember that when you invest, your capital is at risk.