The Royal Family is primarily funded by the government through the Sovereign Grant.
The Sovereign Grant: Explained
For centuries, financial support for the British Monarch has come from the government. Since 2012/13, this arrangement is formalized through the Sovereign Grant, established under the Sovereign Grant Act 2011. The Sovereign Grant is essentially a payment made each year from government funds to support the official duties of the Monarch and maintain the Royal Palaces.
How the Sovereign Grant Works:
- Source of Funds: The Sovereign Grant is calculated as a percentage of the profits of the Crown Estate, a vast portfolio of land, property, and assets owned by the Monarch "in right of the Crown".
- Percentage Allocation: The percentage allocated varies. Currently, a portion of the Crown Estate profits goes towards the Sovereign Grant.
- Purpose: The Grant covers the costs of:
- Official travel
- Property maintenance
- Operating costs of the Royal Household
Other Sources of Royal Family Income:
While the Sovereign Grant is the main source, other income streams contribute to the Royal Family's finances:
- The Duchy of Lancaster: This is a private estate owned by the Monarch and provides income independent of the government.
- Personal Investments: Individual members of the Royal Family may also have personal investments that generate income.
In Summary:
The primary source of funding for the Royal Family's official duties is the UK government, through the Sovereign Grant, which is derived from a percentage of the Crown Estate's profits. They also have other sources of income such as Duchy of Lancaster and personal investments.
