Budget 2020: Junior ISA allowance to rise to £9,000 from April

Junior ISAs were introduced in November 2011 and replaced Child Trust Funds, which had been offered from 2002.

Both are tax-free savings accounts for under-18s. Money saved in one is locked away until the child's 18th birthday, when it converts into a standard ISA. At that point, the child owns the money and can spend it on what they want.

For more info on junior ISAs, including our top picks, see our Junior ISAs guide.

What's changing and why?

The Treasury announced today that from Monday 6 April the amount you'll be able to save tax-free in a junior ISA or Child Trust Fund will rise from £4,368 to £9,000 per tax year.

The Budget policy paper notes: "By saving towards their future, families can give children a significant financial asset when they reach adulthood – helping them into further education, training or work."

How will this affect me?

If you've already got a junior ISA or Child Trust Fund, you'll be able to save much more in it – tax-free – from Monday 6 April.

However, if you've got a Child Trust Fund, it's worth checking whether you should convert it into a junior ISA to up the rate.

If you don't have a junior ISA or Child Trust Fund, the increased allowance will likely only matter to you if your child currently pays tax on savings (this is vanishingly rare) or if you have a large lump sum which you want to lock away for your children.

Otherwise, it's still possible to get better rates with a normal children's savings account, with the additional bonus that the cash isn't locked away.

For more info on these accounts, including our top picks, see our Junior ISAs and Child Trust Funds guides.