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UK taxpayers to shoulder 45% increase in King Charles and royal family's funding
The UK government plans to increase King Charles and the royal family's grant by 45% to £125m ($172m) in 2025, according to a Treasury review of royal funding.
The UK taxpayer will have to pay more for the monarchy from 2025, as the government plans to increase the royal family’s grant by 45%, from £86m to £125m.
On Thursday the Treasury published a review of royal funding, showing how the monarchy’s annual budget, known as the sovereign grant, is linked to the profits from a national property portfolio called the crown estate.
The Treasury tried to spin the review as a pay cut for King Charles III, saying that some of the crown estate funds would go to public services instead.
But the report shows that the monarchy will get a huge pay rise, although it will be delayed for two years.
Next year, the sovereign grant will stay at £86.3m. But in 2025, it will go up by £38.5m, giving the monarchy £124.8m a year. In 2026, it will be £126m.
Buckingham Palace and the Treasury did not deny that the sovereign grant was set to rise significantly.
Lord Turnbull, a former cabinet secretary who was involved in official talks over royal financing, accused the Treasury of hiding how the monarchy was funded.
He said that tying the royal finances to the crown estate profits was “silly” and was meant to create the impression that the king was self-funding and reducing the taxpayer’s burden.
“You get people writing in saying: ‘Isn’t it a good thing that the king is so sensitive to public opinion that he has waived some of the money he could have had?’ I think it’s bollocks. It is deliberate – that’s really what makes me so cross about it. It is a deliberate attempt to obfuscate how the thing works.”
The formula for the sovereign grant was introduced in 2011 by David Cameron and George Osborne. They gave up parliament’s control over royal funding and made it depend on a percentage of the crown estate profits, decided by the royal trustees: the prime minister, chancellor, and the king’s financial adviser. Since 2017, they have set it at 25%.
But they faced a problem with projections of huge increases to crown estate profits, due to offshore windfarm leases. The profits are expected to rise from £443m this year to over £1bn next year.
The Treasury announced on Thursday that the king’s public funding would be reduced from 25% to 12% of the crown estate’s profits from 2025.
The government claimed that this would save £130m in both 2025 and 2026, compared to keeping the rate at 25%.
It said, “Cutting the rate to 12% is expected to reduce the sovereign grant by £24m in 2024-2025 … This money will instead be used to fund vital public services, for the benefit of the nation.”
However, the Treasury did not mention that the king would still get a huge pay rise, as the crown estate’s profits are projected to more than double from £443m this year to over £1bn next year.
Republic, a group that campaigns against the monarchy, said the Treasury’s statement was “grossly misleading”.
Its chief executive, Graham Smith, who was arrested while trying to protest peacefully at Charles’s coronation, said, “This is a time when people are having difficulty putting food on the tables. We’re actually providing more largesse for the royal family, who are really bloated in terms of their money.”
Norman Baker, a former Liberal Democrat minister, and a prominent Republican, also criticized the huge net increase in funding for the king.
He said: “The royals always plead poverty. They always say that any changes to the arrangements are beneficial for the taxpayer. They never are. The arrangements that are made are beneficial for the royal family. It’s always been the way.”
He added that Britain’s royal family was much more expensive than other European monarchies.
A Buckingham Palace spokesperson did not dispute that the sovereign grant would be £124.8m from 2025. However, she said that the increase would be “temporary, only for the financial years of 2025-6 and 2026-7” and would be used to finish renovation works at Buckingham Palace.
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She also pointed out that the sovereign grant had stayed at £86m for several years, which she said was a real-terms cut when adjusted for inflation.
The sovereign grant was first introduced in 2012-2013 at £31m and has been used to justify increases in royal funding, especially for the modernization of the royal palace. Under a “golden ratchet” clause in the Sovereign Grant Act, the amount of money given to the monarch can never go down, even if the crown estate’s profits do.
A Treasury spokesperson, Justina Crabtree, said, “The grant has been largely unchanged since 2020 and this temporary increase covers the remainder of the Buckingham Palace refurbishment. We will review the grant in 2026, expecting to bring it back down in 2027.”
