Do you include pension and home equity in your portfolio when calculating risk level?

[Linguaphile]

We currently have 20k in a S&S ISA (Vanguard LS80), and going forward are aiming to max out DH’s ISA allowance each year specifically with the aim of saving for DC (university mainly, but also house deposits, weddings, etc). We have a 10 year horizon before they turn 18, so that’s what we’re looking at as a date when we’ll begin to draw on the funds.

My question is whether to treat this particular ISA as its own individual portfolio (because we will need that chunk of money sooner than retirement age) or if we should still consider it as a part of our larger portfolio. A friend suggested that we should look at our home equity and workplace supplementary savings as the bond part of our portfolio and just go 100% equities with the ISA savings. He said that since we wouldn’t need all of it at once and we are still so far from our retirement age, it was worth going for 100% equities. We do have a lot of home equity, and we max out the contributions we are allowed to make to DH’s workplace supplementary savings scheme each month. Both of those are obviously much more stable investments, but they aren’t easily accessible without considerable upheaval (we’d have to downsize the house to release equity, or DH would have to either move jobs or retire to access the workplace savings).

I thought LS80 would give us that little bit of cushion against volatility whilst not investing too heavily in bonds (and I like that at least a portion of the bonds are index linked), but perhaps our friend is right and we should just go with something like the Vanguard global all cap fund. The 20% bond allocation isn’t such a huge amount anyway so perhaps at that risk level we wouldn’t even notice much more volatility. What would you do in our situation?

I don't include primary residence, as I will need a place to live. Sure it may go up and down in value but so will anywhere I would move to.

Investing for children for 10 years, you could go 100% equities or you could do 80%. If it was me, I already do 80% for myself so I would pick a different fund, so I knew that fund was for children even though it was in my ISA wrapper not the child's ISA wrapper.

Anything could happen over a 10 year period. You could always start high risk and increase bonds nearer to the time the money will be taken out. You could even use a Target Date fund which would do that for you.

Would the money actually be needed at a specific time? If the market was down when they reached age 18 (or whenever you decide they should get it) could you delay giving them the money? If so, then going 100% the whole time may work out.

Wedding, house deposit - you don't know when those will occur.
University - that is more predictable, so you might want to reduce risk when close to that event for some of the money.