Can grandparents open an ISA for their grandchildren?

Grandparents can’t open Junior ISAs, but they can contribute to them, up to the £9,000 Junior ISA annual allowance.

Only a parent or legal guardian can open a Junior ISA on behalf of a child under 18. Alternatively children aged 16 and 17 can open a Junior ISA for themselves.

A Stocks and Shares Junior ISA* can be a smart choice, offering tax-free growth and the potential for higher long-term returns, along with many more benefits.

However, Junior ISAs are there for the long term, with access available only once your grandchild reaches 18. While they can take over management of the account at 16, they won’t be able to withdraw any money until 18, when the account reaches maturity.

At that point, they have full control and can choose to withdraw, invest, or transfer the funds as they wish. If they choose not to take action at this stage, the account will be converted to an adult ISA.

*Invested in stocks and shares. Capital at risk.

Why is saving and investing for your grandchildren important?

Saving and investing for your grandchildren can give them a valuable financial head start that makes a real difference later in life. Whether it helps to cover university costs, buy a first car, or contribute towards a future house deposit, starting early allows savings more time to grow. This is particularly effective when money is placed in tax-efficient options such as a Junior ISA.

Junior ISAs are designed specifically for long-term saving on behalf of children and come in two main types:

• Cash Junior ISA – Money is held as cash and earns tax-free interest, making it a lower-risk option for steady growth.
• Stocks and Shares Junior ISA – Money is invested in the financial markets, offering the potential for higher returns over the long term. At Unity Mutual, Junior ISA savings are invested in our equity fund.

Saving for your grandchildren can also encourage long-term financial responsibility. When children reach adulthood and gain access to their savings, they benefit not only from the money itself but from the lesson that consistent saving and investing can pay off. 

How can grandparents pay into a Junior ISA?

Once the account is set up, grandparents can either pay directly into it or gift money to their grandchild or the parent, who can then deposit it. Just remember that all contributions count towards the annual Junior ISA allowance (£9,000 for 2025/26), so it’s important to coordinate with the parent to avoid exceeding the limit when paying in directly. 

Who can withdraw money from a Junior ISA?

Money in a Junior ISA is locked away until the child turns 18. Neither parents, grandparents, nor guardians can access or withdraw funds on the child’s behalf.

At 16, the child can take over management of the account, but they still cannot withdraw any money. Full control is only granted when the child turns 18, at which point they can either withdraw the funds or allow the Junior ISA to convert into an adult ISA if they wish to keep the money invested.

Can grandparents contribute to a Junior ISA if they live abroad?

Yes, grandparents living abroad may be able to contribute to a Junior ISA, as long as the child remains a UK resident. Whether you can pay into a Junior ISA and any costs involved (e.g. international fees, bank fees) may vary depending on your own bank and the provider of the Junior ISA. We recommend you check before making your first transfer.

Whilst the Junior ISA grows tax-free in the UK, grandparents may also need to declare contributions in their country of residence, depending on local tax rules.  

What a savings account for your grandchild could help with

Opening a savings account for your grandchild can provide a financial head start and support a range of future goals. Some ways it can help include:

• Education costs – contribute towards university fees once they are 18.
• First big purchases – saving for a car, laptop, or other essentials as they grow older.
• Future home deposit – help them get a head start on buying their first home.
• Teaching financial responsibility – children can learn the value of saving money.
• Special milestones or experiences – birthdays, holidays, or other important events.

Even small, regular contributions can grow over time, especially when placed in a tax-efficient account like a Junior ISA, helping your grandchild build a solid financial foundation for adulthood.

Planning your Junior ISA contributions

Before contributing to a Junior ISA or any other long-term savings plan, it’s important to consider your own financial situation. Once money is paid in, it can only be accessed by your grandchild once they turn 18, so plan your contributions carefully.

• Set a realistic budget – Decide on a lump sum or regular monthly contribution that fits within your finances.
• Factor in the annual allowance – Remember that all contributions to a Junior ISA count towards the annual Junior ISA allowance (£9,000 limit for 2025/26), so coordinate with parents to stay within the cap.
• Prioritise your own financial security – Ensure that your contributions do not compromise your own savings, pension, or emergency funds.
• Consider long-term growth – Even modest, consistent contributions can grow substantially over time, thanks to compound interest or investment growth.

Other ways to save for your grandchild

Beyond Junior ISAs, there are alternative tax-efficient ways grandparents can help grow a grandchild’s savings.

Child's Tax-Exempt Savings Plan

A Child's Tax-Exempt Savings Plan is a simple way to provide a meaningful financial gift for your grandchild. These plans offer guaranteed returns and growth potential, helping your savings build over time. To keep the tax benefits, HMRC sets annual limits on how much can be saved, and applicants must be UK residents.

Child Trust Fund (CTF)

If your grandchild was born between 1 September 2002 and 2 January 2011, they may have a Child Trust Fund (CTF). You may wish to speak with their parent or guardian to check whether one was opened, and who the current provider is. 

Child Trust Funds were a government savings scheme launched in 2005 to help families start building a savings pot for their children. Whilst CTF accounts are no longer available to open, existing accounts continue to grow, and contributions can still be made by grandparents, guardians, or anyone else, up to the account’s contribution limits.   

How to get the most out of saving and investing for your grandchildren

To make the most of your contributions, it’s important to plan carefully and take advantage of tax-efficient options:

• Start early – The sooner you begin saving, the more time the money has to grow. Why not check out our Junior ISA savings calculator to see how your contributions could make a difference?
• Use tax-efficient accounts – Junior ISAs, Child Trust Funds, and Child’s Tax-Exempt Savings Plans all allow your grandchild’s savings to grow tax-free.
• Make regular contributions – Small, consistent contributions often outperform one-off lump sums over time.
• Diversify investments – By holding both a Cash Junior ISA and a Stocks and Shares Junior ISA, families can spread risk across different types of savings. One option allows some money to be kept secure with steady interest growth, while the other allows part of the savings to grow through investments over time. As grandparents can contribute but not open Junior ISAs themselves, it’s a good idea to speak with the child’s parents about what approach best suits their plans for the future.

How to open a Junior ISA with Unity Mutual

If you’re considering saving for your grandchild, it’s best to talk to their parents about what they’re planning and how you could support them.

For support with Junior ISAs, why not book a call as a family with Unity Mutual to find out more about our Stocks and Shares Junior ISA* and how it could help grow long-term savings.

To open the account, the child’s parent or legal guardian will need to complete an application form. Once submitted, we will open the Junior ISA and confirm the account details. At that point, you can begin contributing.

We also offer the option of setting up a regular Direct Debit if you want to make regular savings contributions.

*Terms and conditions apply - capital at risk.