The problem with "move everything to safety three years before"
The advice most parents encounter at this stage is a rule of thumb: some fixed number of years before the goal, shift the whole corpus into safe assets. It is popular because it is easy to remember, and it does address a real risk — a sharp fall in the year before fees are due, with no time and no further contributions to recover from it.
The trouble is that it treats one education goal as a single payment. For a four-year programme it is not. Money that will be spent in the fourth year still has a meaningful runway ahead of it when the child starts college. Converting all of it to cash-like assets on day one is a decision with a cost, particularly for the later years of a long or expensive course.
Replacing that rule with a different fixed formula would not be an improvement. The better move is to change the question.
As the education date approaches, organise the money around when it will actually be needed — not simply around the date college begins.
How that translates into actual holdings — what should sit where, and in what — is a portfolio question, and it belongs with investment strategies rather than here. What this page is responsible for is making sure the question being asked of the portfolio is the right one.
When will each part of the money actually be needed?
Take a four-year undergraduate programme starting in about two years. It is tempting to describe this as one goal, two years away. Look at the actual cash requirements and it is several, spread over six years.
There is the money needed at admission — the first fee instalment, a deposit, initial accommodation and setting-up costs. There is the money for the rest of the first year and the second, which is close but not immediate. And there is the money for the final years, which is still four, five, six years away — roughly the same distance that the whole goal was when many families first started paying serious attention to it.
Those are not the same financial requirement. The first is a near-certain payment on a known date and should be treated as such. The last is a future requirement with time still available to it. A plan that recognises the difference protects what must not be at risk while leaving the rest of the money doing useful work.
One caution on precision: payment schedules vary. Some institutions bill annually, some by semester or term, some ask for a large upfront deposit, and living costs behave differently again. Once the institution is actually known, take the schedule from its own published fee information rather than assuming a pattern.
One goal, several dates
A four-year programme is not one payment two years away
Distance from today
Admission and first payment
First fee instalment, deposit, initial accommodation and setting-up costs.
Nearest requirement
First and second year costs
Remaining tuition and living costs once the course is under way.
Close, but not immediate
Third year costs
Still several years of runway ahead of them today.
Mid-course
Final year costs
As far away now as the whole goal was when many families first started planning seriously.
Furthest requirement
What this changes
Money needed at admission and money needed in the final year do not have the same remaining horizon, and do not need the same treatment.
Illustrative of the relationship between one goal and several payment dates. Payment schedules vary by institution — once the institution is known, take the schedule from its own published fee information.
What shrinks with time
The room to repair a shortfall shrinks
Distance from the goal is not only about market risk. It is about how many ways you still have to fix a problem.
Ten years out, a family that discovers a shortfall has real options. Contributions can rise. Increments can be directed to the goal. There are years for the investments to do their work. The education assumption itself can still be revisited — course, institution, country, whether the child lives at home. Even the funding structure can change.
Two years out, several of those have quietly closed. Very few contributions remain to be made. The pathway is largely decided; the applications have gone in. There is no longer meaningful time for growth to close a gap. What is left is usually current income, assets held elsewhere, or borrowing — the decisions covered in how a real funding shortfall should be handled.
The closer the education expense gets, the fewer years remain to repair a shortfall.
This is not the same as saying the goal becomes unrepairable. Families fund education successfully from a late-discovered gap all the time. It simply becomes more expensive, and more disruptive to everything else, than it would have been earlier — which is why the point of reviewing at this stage is to find the gap now rather than in the week the fee is due.
From range to number
What should become more specific now
Earlier in the plan, the requirement was reasonably a range, because almost nothing about the education was settled. That is exactly as it should be, and it is the argument made on the main child education planning page. As the date approaches, the range should narrow into something close to a real number — because the facts that were unknowable then are becoming knowable now.
Specifically, this is the point at which a family should be able to state, rather than estimate: the likely course and type of institution, and therefore whether this is a domestic or overseas requirement; the actual published fee structure and how it is billed; what accommodation and living arrangements will cost; when each payment falls due; how much of the goal corpus is genuinely available for education and not doing another job; the shortfall, if any, once those are put side by side; how many contributions are still to be made; and whether any other funding source will be needed.
Most of that is fact-gathering rather than financial analysis, and it is usually the step families skip. It is also the step that turns a vague anxiety about whether there is enough into a specific, solvable question.
Where the next decision goes
You should finish this stage able to answer two things. When will each part of the money actually be required? And which parts of the plan need attention before the first payment arrives?
If putting the real numbers together reveals a gap, work through whether the goal is genuinely affordable and what can still change — some levers remain even now. If the shortfall will still be there when the fees are due, the funding decision is the next one to make, ideally before it becomes urgent. If existing investments are scattered and it is unclear how much is truly available for this goal, a portfolio review is the right place to establish that. And where the sequencing genuinely depends on your household's circumstances, that is a conversation with an Investment Manager rather than a rule to apply.