As the drama around Labour's attempted welfare cuts continues to shake the Palace of Westminster, another palace down the road is faring far better.
The royal family received £86.3 million in government funding in the 2024/25 financial year, according to the annual accounts statement released by the Royal Household on Monday. And that will rise to £132 million next year after a big jump in the profits made by the Crown Estate.
The yearly lump sum paid by the government to the royal family, known as the Sovereign Grant, is by law identical to the three previous financial years – and has long been a source of controversy, with republican groups calling for it to be abolished.
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How is the royal family funded?
The three main sources of income are the Sovereign Grant, the estates of the Duchy of Lancaster and Duchy of Cornwall, as well as personal property and investments.
The Sovereign Grant is a percentage of the profits made by the Crown Estate, a vast portfolio of land (separate to the monarch's personal property) valued at £15 billion. Ever since 1760, the monarch has given the Treasury the profits from the Crown Estate in exchange for an annual grant – the Sovereign Grant – from the government, or taxpayer.
The Crown Estate is owned by the monarch as part of his or her "public estate", i.e. by virtue of being the King or Queen. It includes Regent Street in London, nearly 300,000 acres of land and forests, more than half the coastal land in England, Wales and Northern Ireland, and nearly all of its seabed within 12 miles of the coast. There, it racks up vast profits from offshore wind farms.
Last year the Crown Estate made £1.1 billion in profit, thanks to a huge "boom in the offshore wind sector", said The Guardian. That's more than double their level two years ago, of £442.6 million. The monarchy receives 12% of Crown Estate profits, so Charles will earn an official annual income of £132 million next year.
How is the Sovereign Grant made up?
The Sovereign Grant pays for the maintenance of palaces and the official duties of the royals. It is made up of a £51.8 million "core grant", said CNN, which "functions like an expense account for the monarch and their representatives, covering the costs of their public duties, including travel, staff and upkeep of historic properties". The rest is a £34.5 million fund for the ongoing major refurbishment of Buckingham Palace.
It does not, however, pay for security, which "also incurs a high cost given the royals' numerous public engagements".
What does it cost the UK taxpayer?
The Sovereign Grant costs about £1.29 per UK citizen, said the Royal Household, but the taxpayer foots many other bills. Security costs, which are paid for by the government, are not disclosed – guesses range from a few million to £100 million a year. There is also the cost of policing royal events.
The coronation of King Charles, for example, cost taxpayers £72 million, the government revealed last November. There are indirect costs, too, such as the royal family's exemption from inheritance tax.
The grant will be £132 million in 2025/26 – a 53% increase – thanks to that massive increase in profits from the Crown Estate.
What is the criticism of the Sovereign Grant?
"The grant system is mad," said Graham Smith, a campaigner for the anti-monarchy group Republic, in a statement this year. "The palace has recycled the excuse of needing the money for refurbishment of Buckingham Palace, an excuse used to double the grant 10 years ago."
Anti-monarchists also argue that "in debates about public spending and tight finances, then the full picture of royal funding needs to be recognised", said the BBC.
Republic has analysed the "true cost" of the royal family to the public, and claimed it now exceeds £500 million a year.
"It's time that half a billion pounds was put to good use, that there was proper accounting for the cost of the monarchy and for that cost to be slashed to just a few million pounds," said Smith.
What is the counter-argument?
There are "harder-to-measure economic benefits from the royals", said the BBC, such as "boosting tourism and supporting overseas trade". A YouGov survey in 2023 found that 55% of Britons viewed the monarchy as good value for money; 30% saw it as poor value.
"Soft power is hard to measure but its value is, I believe, now firmly understood at home and abroad," said James Chalmers, the King's Keeper of the Privy Purse and treasurer to the King, in a statement to accompany the report this week.
Royal family members undertook more than "1,900 public engagements in the UK and overseas", the latest Sovereign Grant Report said.
Michael Stevens, the former King's Keeper of the Privy Purse, said last year that he expected a reduction in the size of the Sovereign Grant as part of the review in 2026/27.
