Custodial & Junior Accounts (UK)

Custodial & Junior Accounts (UK)

When your crowdfunding campaign succeeds or your business starts earning money, you need somewhere safe to keep it. But if you are under 18, the rules about bank accounts and savings are different from adults. This guide explains your options, what your parents need to do, and how to make the most of your money while staying on the right side of UK regulations.

Why Under-18s Cannot Just Open Any Account

In the UK, most financial products require you to be 18 to open them independently. This is not because the law thinks young people are irresponsible — it is because financial contracts are legally binding, and minors cannot enter into most binding contracts.

That said, there are plenty of accounts specifically designed for young people. The key is knowing which ones exist and which ones suit your situation.

The Main Account Types

Here is a breakdown of the accounts available to you:

Junior ISAs (JISAs)

A Junior ISA is a tax-free savings or investment account for under-18s. You can save up to £9,000 per tax year (2025/26 limit) and pay no tax on the interest or growth.

There are two types:

• Cash JISA — works like a savings account with interest
• Stocks & Shares JISA — your money is invested in funds (higher risk, potentially higher return)

The catch: Money in a JISA is locked until you turn 18. You cannot withdraw it early, even in an emergency. This makes JISAs great for long-term savings but not suitable for business funds you need to spend.

Who controls it: A parent or guardian opens and manages the account. From age 16, you can manage a Cash JISA yourself. At 18, the JISA automatically converts to an adult ISA and you get full control.

Best for: Saving a portion of your business profits for the future — university, a car, or reinvesting in your business when you are 18.

Child Trust Funds (CTFs)

If you were born between 1 September 2002 and 2 January 2011, the government may have opened a Child Trust Fund for you with a £250 voucher. CTFs work similarly to JISAs — tax-free but locked until 18.

If you have a CTF: You can transfer it into a JISA for potentially better interest rates. Ask your parent to check whether you have one — some families have forgotten about them.

Annual limit: Same £9,000 combined limit with any JISA.

Children's Savings Accounts

These are the most flexible option for young entrepreneurs. Most high-street banks offer them, and many building societies have competitive rates.

Key features:

• Opened by a parent/guardian (some banks let children aged 7+ open with parental consent)
• No lock-in — you can withdraw money when you need it
• Interest is taxable, but you have a £100 rule: if the money was gifted by a parent and earns more than £100 interest per year, it is taxed as the parent's income. Money you earned yourself does not have this restriction.
• Typical interest rates: 3-5% (as of 2025)

Best for: Keeping your business income accessible while earning some interest. This is where most teen entrepreneurs should hold their working capital.

Teen Current Accounts

Most major UK banks offer current accounts for 11-17 year olds:

Important: These are personal accounts, not business accounts. You can use them for small-scale business transactions, but if your turnover grows significantly, you should speak to the bank about proper arrangements.

Parental controls: Most teen accounts give parents visibility of transactions. Some (like Starling Kite and GoHenry) allow parents to set spending limits and receive instant notifications.

What About Business Bank Accounts?

Here is the reality: most UK banks will not open a business bank account for anyone under 18. A few options exist:

• Sole trader using a personal account — perfectly legal. HMRC does not require a separate business account, though it makes bookkeeping easier.
• Parent opens a business account — a parent can open an account in their name for your business activities. Keep clear records showing the money belongs to your business.
• Digital banks at 16+ — some digital banks (like Monzo and Starling) offer accounts from 16 that can be used for business purposes, though they are technically personal accounts.

How Futurepreneurs Handles Your Money

On our platform, funds follow a specific custody pattern designed for young people:

• Backers pay via Stripe — card details are handled securely by Stripe, never by us
• Funds are held by the platform until your funding goal is reached (all-or-nothing model)
• Milestone-based drawdowns — when you need funds, you request a drawdown against a milestone
• Teacher approves the drawdown, then parent approves
• Funds are released to the parent's connected account (via Stripe Connect)

This means your parent acts as the custodian for campaign funds. They receive the money and help you spend it on your approved milestones. This is the same "responsible adult" pattern used across UK financial services for minors.

Age Thresholds That Matter

Here are the key ages where your financial options change:

• Under 11: Parent manages everything. You can have a savings account in your name but a parent controls it.
• 11-15: You can get a teen current account with a debit card. Parent still co-manages.
• 16: You can manage your own Cash JISA. You can open accounts at some digital banks (Monzo). You can register as self-employed with HMRC.
• 17: Last year for JISA contributions (account matures at 18).
• 18: Full financial independence. Open any account, sign contracts, become a company director (from 16, but full financial autonomy at 18). JISA converts to adult ISA. CTF matures.

Practical Tips for Young Entrepreneurs

1. Separate personal and business money. Even if it is just two pots in the same savings account, know what is "yours" and what belongs to the business. A simple spreadsheet tracking business income and expenses is enough.

2. Save a percentage of every profit. A good rule of thumb: 20% into savings (JISA or savings account), 30% for tax (even if you will not owe any — better safe than sorry), and 50% to reinvest or spend.

3. Talk to your parent about the plan. They need to understand where money is going, especially if they are co-managing accounts. Show them your budget and milestone plan.

4. Keep every receipt. Digital photos of receipts are fine. Create a folder on your phone or a shared Google Drive folder with your parent.

5. Do not rush into investments. If your JISA offers a stocks and shares option, understand that investments can go down as well as up. Cash is safer for money you might need in the next few years.

Key Takeaways

• You have real options — children's savings accounts and teen current accounts give you practical access to your money
• JISAs are great for long-term savings but your business needs accessible funds too
• Your parent is your financial partner until you turn 18 — work with them, not around them
• Keep business money separate from pocket money and birthday savings
• Age 16 is a big milestone — more account options, self-employment registration, and JISA self-management
• Futurepreneurs' custodial model mirrors best practice — teacher and parent oversight protects you while giving you real entrepreneurial experience