Hundred SummersJunior ISA vs junior pension: saving for a child, compared
The same yearly payment into a Junior ISA, which is theirs at 18, or a pension in their name, which gets 20% tax relief but is locked until 57. Both followed in today's money. Your figures never leave your browser.
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Worked example
Computed when this page was built by the same engine that runs the calculator above, so the figures below and the live tool can never disagree. Change any input above to see your own.
| Inputs | |
|---|---|
| Child's age | 0 |
| Paid in each year to 18 | £2,880 |
| Growth / inflation | 5.0% / 2.5% |
| Tax on pension income later | 20% |
| Results | |
|---|---|
| Junior ISA at 18 | £65,686 |
| Tax relief added to the pension | £12,960 |
| Pension at 57, after tax | £178,631 |
| Junior ISA left untouched to 57 | £168,123 |
The next question
Is a Lifetime ISA worth it once they're 18? →Lifetime ISA calculator
Or answer it with everything else: the full Hundred Summers plan connects your pay, pensions, savings, property, tax and spending year by year, and stress-tests them across 500 simulated market histories.
Read the guide
- ISA or pension? Where long-term money should go, and the Lifetime ISA's place →The same gross pay by two routes (pension with relief and a tax-free quarter, or ISA after tax and NI) compared on your rate now and in retirement, why the pension usually wins on tax and the ISA on access, and where the Lifetime ISA's 25% bonus fits.
The two accounts
A Junior ISA takes up to £9,000 a year, grows free of tax, and at 18 becomes an adult ISA in the child's name: the money is theirs, for anything. A pension for a child with no earnings takes up to £2,880 a year, which the provider tops up with 20% tax relief to £3,600. It cannot be touched until the minimum pension age, 57 under today's law and possibly later, and then a quarter comes out tax-free and the rest is taxed as income.
What the comparison shows
At the same growth the pension's 20% relief, less tax on three-quarters of it later at the basic rate, leaves it about 6% ahead of an ISA that is never touched until the same age. The real difference is access: one pays for a start in adult life, the other for a retirement 40 years further on. Many families use both. The ISA vs pension calculator makes the same comparison for an adult, where higher-rate relief and the employer change the answer, and the Lifetime ISA calculator covers the account a child can open at 18.
Sources
- gov.uk, Junior Individual Savings Accounts.
- gov.uk, Tax on your private pension contributions: tax relief (the £2,880 limit with no earnings).