Royal family core funding set to almost double to £100 million a year
The monarchy’s core finances will almost double to £100 million a year within three years under the revised formula of the Sovereign Endowment.
This significant increase will see the Royal Household receive £99.9 million in core grants in 2027-28; This represents an increase of £48.1 million from the £51.8 million allocated in 2024-25.
The decision was made by the Royal Trustees, comprising outgoing Prime Minister Sir Keir Starmer, Chancellor Rachel Reeves and Keeper of the King’s Purse and Treasurer James Chalmers.
This significant support was allocated to clearing the backlog of maintenance work in occupied royal palaces, increasing cybersecurity measures in royal residences, and installing energy-saving heating systems. £11 million has been specifically allocated to replace aging boilers at Windsor Castle.
Mr Chalmers emphasized that the financing was “not a blank cheque” and came with strict monetary value requirements.
It stated: “Expenditure is governed by the same standards and disciplines as any publicly funded organisation, with value for money requirements, detailed planning, multi-annual strategies, independent auditing and Treasury oversight.”
This new funding structure follows a decade-long temporary increase in the Sovereignty Grant, launched in 2017, which funded the £369 million overhaul of Buckingham Palace.
This additional reservation grant is expected to conclude in 2027. As a result, the total annual grant will fall from £137.9 million in 2026-27 (including both core funding and palace renovation funds) to a core funding of £99.9 million in 2027-28.
Despite this overall decline from the peak, the core funding itself represents a significant increase.
Mr Chalmers acknowledged the change, saying: “This year we are announcing that the State Grant will be reduced in 2027-28 for the first time since its inception.”
He added: “In line with Her Majesty’s express wishes, this amount will be reduced to £100 million, a level set by the Royal Trustees to ensure that the work of our Head of State and the wider Household is properly and appropriately supported in the interests of the country.”
However, the new figure of £99.9 million is almost double the core grant of £51.8 million in 2024-25 and is £27.8 million higher than the core grant of £72.1 million in 2025-26.
This official funding, amounting to around £100 million per year, is envisaged to continue for a period of five years until the next review. This is due to an expected “significant impact” on Crown Estate profits, which had previously seen a huge increase with the expiry of Offshore Wind option fees, according to the Royal Family’s report on royal finances.
In 2025-26, over £28.2 million has been invested in the ongoing estate maintenance of historic buildings beyond Buckingham Palace; An increase of around £10 million, as detailed in the Sovereign Grant accounts.
For context, in 2016-17, before the palace’s renovations began, the State Grant for official functions and general housing maintenance was £42.8 million; this amount is equivalent to £60.4 million today when adjusted for inflation.
The Crown Trustees’ review determined that the State Grant will be calculated at 20.5 per cent of the Crown Estate’s 2027-28 net profits for the next five years, an increase from its current rate of 12 per cent.
Mr Chalmers reiterated: “It is important to emphasize that the State Grant does not provide personal income to members of the Royal Family. It funds the work of the institution, not their private lives or private wealth.”
The Sovereign Grant is received from public funds in return for the King surrendering income from the Crown Estate, with payments delayed by two years. The Crown Estate’s 2025-26 annual accounts, published on Thursday, reported a net income profit of £487 million.
The Treasury confirmed that the recalculation of the State Grants Bill aims to provide “a sustainable and proportionate funding framework going forward”.
