If you’ve ever wondered how the Royal Monarchy is funded, or where the Queen and the Royal Family get their spending money, rejoice, because you’ve just found a simple guide that should help you understand this commonly overlooked aspect of British government! There are three primary sources of public and private funding for the Royal Monarchy – The Sovereign Grant, The Privy Purse, and the Queen’s personal income. The royal funding is available to the Queen and any official of the Royal Household who acts on her behalf. However, depending on the source, there are rules that govern how the money is spent. Here’s a quick summary of what each of the three funding sources are used for:
The Queen’s Personal Income is Used to Meet Privates Expenses
Vast amounts of inherited wealth and long-term investments can seem like foreign concepts to the majority of UK citizens. In fact, research conducted by Readies – one of the UK’s leading providers of no credit check payday loans – found that most UK consumers do not have estates or long-term investment portfolios. The Queen’s private expenses are met by her own personal income and wealth, which is primarily derived from her private estates and extensive managed investment portfolio.
The Queen inherited both the Sandringham and Balmoral Estates from her father. However, it’s important to note that the Queen’s personal property portfolio does not include the Royal Residences, Crown Jewels, and most of the royal artwork, as these treasures are considered property of the nation rather than personal belongings of the Queen.
The Privy Purse Takes Care of the Rest of the Royal Family
The Privy Purse is simply an old term that describes any income generated by the Duchy of Lancaster. This fund covers any of the Queen’s private and official expenditure which is not included on the Civil List.
The Duchy of Lancaster is simply a fancy name for a managed portfolio of property and assets that are held in trust for use by the Sovereign. It should be noted that this fund is administered separately from other similar funds like the Crown Estates. Funds from the Privy Purse are also used to pay for expenses that are incurred by members of the Royal Family.
A Single ‘Sovereign Grant’ Now Funds the Queen’s Official Duties
Prior to 1 April 2012, the funding of the Queen’s official duties was handled by separate grants issued under the Civil List as well as three Grants-in-Aid – Royal Travel, Maintenance of the Royal Palaces, and Communications and Information. Now, a single Sovereign Grant encompasses all of this funding within a consolidated grant that is administered annually.
Funding for the Sovereign grant comes from 15% of the Crown Estate’s revenue. However, that percentage and other terms are reviewed every 5 years by a group of Royal Trustees, which includes the Prime Minister, Keeper of the Privy Purse, and Chancellor of the Exchequer. Financial accounts for the grant are still prepared annually by the Keeper of the Privy Purse. The new Sovereign Grant system was designed to hold the Royal Household subject to the same kind of scrutiny as other forms of official expenditure through the Public Accounts Committee and National Audit Office.
Hopefully, this guide has helped you to understand the royal finances a little more. Let us know your thoughts.