A MR sensor is disclosed that has a free layer (FL) with perpendicular magnetic anisotropy (PMA), which eliminates the need for an adjacent hard bias structure to stabilize free layer magnetization, and minimizes shield-FL interactions. In a TMR embodiment, a seed layer, free layer, junction layer, reference layer, and pinning layer are sequentially formed on a bottom shield. After forming a sensor sidewall that stops in the seed layer or on the bottom shield, a conformal insulation layer is deposited. Thereafter, a top shield is formed on the insulation layer and includes side shields that are separated from the FL by a narrow read gap. The sensor is scalable to widths