Royal finances: Where does the Queen get her money?

By Tom Edgington
BBC News

  • Published
Royal family standing on the balcony of Buckingham PalaceImage source, Getty Images

The Royal Family has opened its books to show how the Queen receives her money.

A taxpayer-funded payment, known as the Sovereign Grant, is paid to the Royal Family each year - but it's not the Queen's only source of income.

What does the Queen receive from the government?

For 2021-2022 the Sovereign Grant was set at £86.3m - equivalent to £1.29 per person in the UK. This does not include security costs.

However, work on Buckingham Palace, which is undergoing a 10-year refurbishment plan, drove up total spending for the year to £102.4m - an increase of 17% on the previous year.

Money from leftover Sovereign Grant funds from previous years was used to meet the shortfall.

What is the Sovereign Grant spent on?

It is used by the Queen and other members of the Royal Family to pay for royal duties, such as receptions and garden parties and visiting schools. Last year, almost 2,300 official engagements were carried out.

With the easing of restrictions following the pandemic, travel costs rose by £1.3m to £4.5m in 2021-22. This included 26 journeys that cost more than £15,000 each. For example, a Royal Train journey by the Queen to attend a G7 leaders' reception in Cornwall cost £31,796.

The most expensive trip, costing £226,383, was the the Duke and Duchess of Cambridge's tour of the Caribbean in March.

Image source, Getty Images

Most of the grant was spent on the cost of maintaining occupied royal palaces, and staff pay. Last year £55m was spent on efforts to accelerate work on Buckingham Palace in time for the Platinum Jubilee - an increase of 41%.

Where does money for the Sovereign Grant come from?

The payment is based on the profits of the Crown Estate, a property business owned by the monarch but run independently.

Among its holdings are Regent Street in London and the Ascot racecourse in Berkshire.

It is not the private property of the Queen - it merely belongs to the monarch for the duration of their reign. This means the Queen can't sell the Crown Estate or keep the revenue for herself.

How is the Sovereign Grant calculated?

Normally, the Queen is given 15% of the Crown Estate profits from the previous two years, with the government keeping the remainder.

However, it was agreed that from 2017 she would receive 25% for the following 10 years. This is to help pay for a £369m refurbishment of Buckingham Palace.

What is the history of the Crown Estate?

The Crown Estate was originally the name for lands owned by the monarch - it dates from the time of the Norman Conquest.

In 1760, King George III reached an agreement with the government to surrender his income from the Crown Estate. In return, it was agreed that the King (and his successors) would receive a fixed annual payment - originally known as the Civil List.

The Civil List was replaced in 2010 by the Sovereign Grant.

Image source, Getty Images
Image caption,
Ascot racecourse is owned by the Crown Estate

What happens if the Crown Estate's profits fall?

If the Crown Estate's profits fall, the Queen still receives the same grant as the previous year, which is topped up by the Treasury.

This rule was created in a law called the Sovereign Grant Act 2011.

How else does the Royal Family receive money?

The Queen also receives money from a private estate called the Duchy of Lancaster, which is passed down from monarch to monarch.

It covers more than 18,000 hectares of land in areas such as Lancashire and Yorkshire, as well as property in central London, and generates about £20m a year in profits.

Whoever holds the title of Duke of Cornwall (currently Prince Charles) benefits from the Duchy of Cornwall. It mainly covers land in south-west England and also generates about £20m a year.

The way money is spent from the Duchy of Lancaster of Duchy of Cornwall is not made public.

The Queen also has income through properties such as Sandringham and Balmoral, which she owns personally. Some Royal Family members also have private art, jewellery and stamp collections.

The Queen and Prince Charles voluntarily pay tax on the profits from the duchies.

Image source, Getty Images
Image caption,
Security costs are met by the police rather than the Sovereign Grant

What about security?

Some argue that the true cost of the Royal Family is far higher.

That's because the Sovereign Grant isn't used to pay for security, which is usually picked up by the Metropolitan Police.

Republic, an organisation that campaigns for an elected head of state, estimates that the total yearly cost of the monarchy, once security is factored in, is about £345m - several times higher than the Sovereign Grant.

However, other organisations - such as the consultancy Brand Finance - say that security and other costs are outweighed by what the monarchy contributes to the economy each year, such as boosting tourism.