How do I start investing for my kids? Six ways to get going
Written by Boring Money
11 Aug, 1970
The most effective ways to get your kids investing are: opening a Junior Stocks and Shares ISA, using your own ISA allowance to keep control, opening a Junior SIPP for long-term growth, using kids' apps, involving your child in the process, and deciding in advance who controls the money and when. According to Boring Money research, 2% of UK adults hold a Junior Stocks & Shares ISA on behalf of a child. [1] Our data also shows that the main objective was to pass on their investments to their children/grandchildren. [2] Each route has different trade-offs around tax efficiency, access and control. So, which is right for you and your child?
Investing early gives a child's money decades to grow - the hard part is turning that into a decision, not a vague "one day" plan. Here are six ways to do it, with the tax, access and control trade-offs for each.
1. Should I open a Junior Stocks and Shares ISA (JISA)?
If you're comfortable handing over full control at 18, a Junior ISA is good as it lets you invest up to £9,000 per child per tax year, tax-free, with contributions from anyone. The trade-off: once your child turns 18, the money becomes entirely theirs, with no say for you over what happens next.
For many, this is an obvious starting point. A Junior ISA lets you invest up to £9,000 per child per tax year (2026/27), and any growth is completely free of income tax and capital gains tax. Anyone can contribute, although only a parent or legal guardian can open the account.
The money is locked away until your child turns 18, at which point it becomes theirs -completely and unconditionally. Bear in mind that you have no say over what happens to it after that.
This is good for parents who are comfortable handing over full control at 18 and want the simplest, most tax-efficient route. However, if you’d rather have some say in how the money is used once their child is an adult, this may not be the right option for you.
You can only hold one stocks and shares JISA and one cash JISA per child, and the allowance doesn't carry over if you don't use it.
2. Should I use my own ISA instead of a JISA?
If you'd rather keep control than hand it over at 18, investing within your own ISA can be an option for you. It lets you decide when, or whether, to give your child the money, and keeps it accessible in an emergency. However, it uses up your own £20,000 allowance, and the pot isn't legally ring-fenced as theirs.
Here's an option a lot of parents don't realise exists - rather than opening a JISA, you can simply invest for your child within your own stocks and shares ISA (up to your own £20,000 allowance). Essentially, portion of it as "theirs" without it legally being theirs.
You decide when, or whether, to hand the money over. If you're nervous about a JISA landing in full in the lap of an 18-year-old with no experience of managing money, this avoids the issue entirely. It's also more flexible, because if a family emergency ever meant you needed access to that money, you could get to it.
The downside is that it eats into your own ISA allowance, and if anything happens to you, the money forms part of your estate rather than sitting separately for your child. There's also no independent, ring-fenced pot that's clearly "theirs," which, without careful financial education, could mean they are disengaged with the money and don’t feel like the money belongs to them.
You could use a mix - a JISA for a portion, and their own ISA for the rest, so there's a guaranteed pot alongside a more flexible one.
3. Is a Junior SIPP worth opening for long-term growth?
Yes, for pure long-term growth - every £2,880 you pay in becomes £3,600 with 20% tax relief, a 25% uplift before it's even invested. The catch: it's locked away until pension age, likely a child's late fifties or sixties, so it can't help with university or a first home. Best for those who've already maxed out ISAs.
A Junior SIPP (a pension for a child) sounds unusual, but the length of time in the market means maximised growth. You can pay in up to £2,880 a year, and the government automatically tops it up by 20% tax relief, turning that into £3,600 which gets put into a pension. This creates a 25% uplift on your money before it's even been invested.
It's locked away until pension age, which is currently 55 and rising. For a child born today, that likely means somewhere in their late fifties or early sixties. The downside of this is that it’s money that can’t be used for university fees or a first flat.
This is good for grandparents and parents or family members who've already maxed out ISA contributions and want another tax-efficient way to help, with an eye on the very long term. Even modest amounts, invested for around 60 years, have decades of compounding to work with. However, anyone who wants to help with nearer-term costs like education or a deposit. A JISA or your own ISA will serve that better.
4. Do kids' money apps actually let you invest, or just save?
Mostly just saving apps like Monzo's Under 16s and NatWest's Rooster Money hold cash, without an ISA's tax wrapper or growth potential. GoHenry is an exception: it includes a genuine Junior Stocks and Shares ISA invested through Vanguard. Always check whether an app offers a savings account or an actual investment wrapper - the difference compounds significantly over time.
Most kids' banking apps, such as Monzo's Under 16s account or NatWest's Rooster Money, are good for teaching budgeting, spending and saving habits, and some pay decent interest. They are savings accounts, though, not investment accounts. The money sits in cash, so it doesn't benefit from the tax wrapper or long-term growth potential of an ISA.
GoHenry is a bit different. Alongside its debit card and pocket money features, it has a Junior Stocks and Shares ISA built directly into the app, investing into a Vanguard multi-asset fund, with no minimum monthly contribution and a £9,000 annual allowance shared with any cash JISA. It's a useful way to educate your children, allowing them to see their pocket money and their investing sitting side by side.
Before you assume an app is investing for your child, check whether it's a savings account or an actual stocks and shares wrapper. They're not the same thing, and the difference over 10 to 15 years will be significant.
5. How can I get my child involved in their own investing?
Show them the account, don't just automate it. Let your child see the balance occasionally, have input into what's invested - a global fund, or something linked to a company they recognise - and use real numbers to explain compounding. Seeing £50 a month grow dramatically by 18 builds financial confidence far more than a surprise lump sum at 18.
Setting up a direct debit into a JISA and forgetting about it is certainly better than doing nothing, but it's a missed opportunity if your goal is also to build your child's confidence and understanding, not just their bank balance.
Where possible, show them the account occasionally, explain it simply and let them see the number change over time. If the platform allows it, let them have some input into what's invested in, such as a global fund, a UK fund, or something linked to a company or theme they recognise. Use real numbers to explain compounding
. £50 a month invested from birth, growing at a long-run average return, will compound in a pleasingly dramatic looking way by 18. Seeing the maths tends to make more impact than being told saving is important.This won't turn every child into an engaged investor overnight, but it does more for financial confidence than a pot of money they only find out about on their 18th birthday.
6. Who should control the money, and when should they get access?
Decide this in advance, not on your child's 18th birthday. If unconditional access at 18 feels too soon, a bare trust offers more flexibility around timing than a JISA, or you can simply hold money in your own name to fund specific things like a deposit or course later. There's no single right answer - it depends on how much control matters to you.
The biggest decision here is a question of trust and timing: are you comfortable with your child having full, unconditional access to whatever you've built up, the moment they turn 18?
If the answer is "not entirely," it makes sense to plan. Don’t ignore it and hope for the best. Some families lean on a bare trust (money held in trust for a child, but with slightly more flexibility around timing and access than a JISA) instead of, or alongside, a JISA. Others simply keep some of the money in their own name for longer, using it to help fund specific things such as a deposit, a course or a first car, rather than handing over a lump sum.
There's no correct answer here. The right structure depends on your situation and psychology, i.e. how much control matters to you, how much flexibility you want, and how comfortable you are giving up access to the money for good.
Disclaimer:
Investments can fall as well as rise, and you could get back less than was paid in. Tax treatment depends on individual circumstances and rules can change. We're not authorised to give you personalised financial advice, so if your situation is complex, or you want a recommendation tailored to your family, please speak to a regulated financial adviser.
Historically, money invested for more than five years has tended to grow more than money left in cash, but that isn't a guarantee, and every family's comfort with risk is different.
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