👑 Sovereign Grant up £45M for 2025-26, funded by offshore wind

The money that funds Charles III's official duties isn't a stipend the King sets himself - it's a formula written into law, reviewed on a five-year cycle, and built so it can never go down. The Sovereign Grant, created by the Sovereign Grant Act 2011, pays the monarch an annual share of the Crown Estate's income from two years prior. That share has moved from 15% to 25% and back down to 12% over the past decade, first for a palace renovation and then because of offshore wind.

The formula

Before 2012, royal funding ran through four separate pots: the Civil List paid by the Exchequer, plus grants-in-aid for royal travel, for communications, and for palace maintenance, split between the Department for Transport and the Department for Culture, Media and Sport. The Civil List had been frozen at £7.9 million a year from 2000 until December 2010, with the royal household drawing down a £35 million reserve to cover the shortfall. The Sovereign Grant Act 2011 folded all four into one payment, indexed to Crown Estate revenue and reviewed every five years by the Royal Trustees. The starting index was 15%. The law also builds in a one-way ratchet: the grant can't fall even if Crown Estate revenue drops, though it can't rise so far that the unspent reserve fund grows past half of annual spending.

The renovation premium

The percentage first moved in 2017, when the Royal Trustees' review recommended raising it to 25% for ten years to pay for a £369 million refurbishment of Buckingham Palace, scheduled to finish in 2027. Parliament approved the increase in 2017, and the Sovereign Grant rose 66% the following financial year. When Crown Estate rental income fell during the COVID-19 pandemic, the Treasury committed to make up the shortfall so the grant would not fall.

The wind-farm pivot

Charles III kept the existing Sovereign Grant provisions running by a statutory order after his September 2022 accession. In January 2023, the Keeper of the Privy Purse asked the government, on the King's behalf, to cut the percentage so the grant wouldn't balloon on the back of roughly £1 billion a year in new income from offshore wind leases on the Crown Estate's seabed.

"wider public good"

King Charles III, who the Guardian reported said the offshore wind profits could serve the 'wider public good', January 2023

The government agreed. In July 2023, with wind-lease sales pushing Crown Estate profits up sharply, the percentage was cut to 12% of net profits - while the cash payment stayed level in pounds. It didn't stay level long: in July 2024, rising offshore wind proceeds pushed Crown Estate profits up again, adding £45 million to the Sovereign Grant for the 2025-26 financial year.

"a reduction in the absolute amount of the sovereign grant will be sought as part of the royal trustees review in 2026-27, through primary legislation"

the Keeper of the Privy Purse, announcing the July 2024 increase

What it doesn't cover

The Sovereign Grant funds the Royal Household's official running costs - maintaining the Occupied Royal Palaces used for ceremonial events, royal travel for official engagements, and the employment costs of household staff. Even monarchies keep a drawer marked 'not my department.' The Treasury put the bill for the ten days of mourning and the state funeral of Elizabeth II at £162 million; the coronation of Charles III and Camilla cost taxpayers £72 million, funded by the government, with only a small amount drawn from the Sovereign Grant.

The King and the Prince of Wales also draw private income on top of all this, from the Duchy of Lancaster and the Duchy of Cornwall respectively - revenue the Sovereign Grant accounting never touches.