Education costs have historically risen faster than general inflation. Planning against today’s prices will understate the target, and this page assumes you would rather know that now.
Why this goal is unusual
Two features make education saving different from every other goal, and both work in your favour if you start early.
- The date cannot move
- A child turns eighteen on a known day. Unlike a house or a car, you cannot postpone this goal by a year when the timing is inconvenient.
- The horizon is unusually long
- Eighteen years is long enough for compounding to do most of the work, if the money is somewhere it can compound.
- The cost is not one payment
- It is three or four years of fees and living costs. You need a pot that draws down over time, not a single lump on one date.
- Inflation is the real enemy
- Over eighteen years, cash loses to rising costs. This is the goal where holding everything in savings is the risky choice.
The glide path
Because the date is fixed, the risk you take should fall as it approaches. This is the single most important mechanic on this page.
| Years remaining | Approach | Reasoning |
|---|---|---|
| 18 to 10 | Mostly growth investments | Long enough to absorb falls; inflation is the bigger threat. |
| 10 to 5 | Shift towards balanced | Still time to recover, but the margin is narrowing. |
| 5 to 2 | Shift towards cautious | A large fall here would be difficult to recover before the date. |
| 2 to 0 | Mostly cash and savings | The date is fixed. Protecting the amount now matters more than growing it. |
| During the course | Cash, drawn down each term | It is being spent. It should not be exposed. |
The mistake is not de-risking
Families who leave the whole pot in growth investments until the final year occasionally meet a bad market in exactly the wrong month. The glide path exists to make that impossible.
Working out the target
- 1Estimate the annual cost today: tuition, accommodation, living costs, travel.
- 2Multiply by the number of years of the course.
- 3Uplift it for inflation over your horizon. Even a modest annual rate roughly doubles a figure over eighteen years.
- 4Subtract what you expect from other sources: grants, bursaries, the child’s own earnings, family contributions.
- 5Divide the remainder by the months you have. That is the monthly figure.
Aim for a share, not the whole thing
Many families target half or two-thirds and treat the rest as loans, work or later contribution. A partial pot achieved beats a full pot abandoned in year four.
If you are starting late
Starting when a child is twelve is a different problem from starting at birth, and pretending otherwise leads people to take risks that do not fit the horizon.
- With under five years, treat it as a savings goal. Do not try to make up lost time by taking market risk — that is how a short pot becomes a shorter one.
- Focus on the amount rather than the return. Contributions dominate outcomes over short horizons; growth dominates only over long ones.
- Consider funding the later years rather than the first. Loans and part-time work often cover year one more easily than year three.
- Talk to the child. A seventeen-year-old who knows the position makes better choices than one who discovers it in August.
- Grandparents who want to help are usually more effective contributing regularly and early than in one gift at eighteen.
Documents you may also need
Financial Planning
Working out what your money is for, in the right order: an emergency fund first, then the goals with dates on them, then the long horizon.
Financial PlanningPersonal Goals
Turning "one day" into a monthly figure with a date on it: how to size a goal, where to keep the money, and what to do when you fall behind.
Financial PlanningTax-Efficient Saving
Using the allowances you already have, in the right order, before reaching for anything complicated — and why the tax tail should not wag the dog.
This document was last updated on 1 August 2026. We publish the current version here at all times; superseded versions are available on request.
If anything on this page is unclear, write to us and we will explain it.