The monarchy's core funding is set to nearly double within three years, reaching £100 million annually, under a revised formula for the Sovereign Grant.
This significant increase will see the Royal Household receive £99.9 million as a core grant in 2027-28, marking a £48.1 million jump 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 the King’s Keeper of the Privy Purse and Treasurer, James Chalmers.
The substantial boost is earmarked for addressing a backlog in maintenance across occupied royal palaces, enhancing cybersecurity measures at royal residences, and installing energy-efficient heating systems. Notably, £11 million has been specifically allocated to replace ageing boilers at Windsor Castle.
Mr Chalmers was keen to stress that the funding was "not a blank cheque" and came with stringent value-for-money requirements.
He stated: "Expenditure is governed by the same standards and disciplines as any publicly funded body, with strict value-for-money requirements, detailed planning, multi-year strategies, independent audit, and Treasury oversight."
This new funding structure follows a temporary decade-long uplift to the Sovereign Grant, introduced in 2017, which financed the £369 million overhaul of Buckingham Palace.
This additional reservicing grant is due to conclude in 2027. Consequently, the overall annual grant will decrease from £137.9 million in 2026-27 (which included both core funding and the palace renovation funds) to a core funding of £99.9 million in 2027-28.
Despite this overall reduction from the peak, the core funding itself represents a substantial increase.
Mr Chalmers acknowledged this shift, saying: "This year we are announcing that the Sovereign Grant will be reduced in 2027-28 for the first time since its inception."
He further added: "In line with His Majesty’s clear wishes, it will be reduced to £100 million, a level that the Royal Trustees have determined will ensure the work of our Head of State and the wider Household can be properly and appropriately supported in the nation’s best interests."
However, the new figure of £99.9 million is almost double the core grant of £51.8 million from 2024-25, and £27.8 million higher than the £72.1 million core grant in 2025-26.
This official funding of approximately £100 million per year is projected to continue for a five-year period until the next review. This is due to anticipated "significantly impacted" Crown Estate profits, which previously saw a major boost, as Offshore Wind option fees are set to cease, according to the Royal Household’s report on royal finances.
In 2025-26, over £28.2 million was invested in ongoing property maintenance for 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 renovations began, the Sovereign Grant for official duties and general residence upkeep stood at £42.8 million, a sum equivalent to £60.4 million today when adjusted for inflation.
The Royal Trustees’ review determined that the Sovereign Grant will now be calculated as 20.5 per cent of Crown Estate net profits from 2027-28, an increase from the current rate of 12 per cent, for the next five years.
Mr Chalmers reiterated: "It is important to emphasise that the Sovereign Grant does not provide personal income to members of the Royal Family. It funds the work of the institution – not private lives or private wealth."
The Sovereign Grant is drawn from public funds, provided in exchange for the King’s surrender of revenue from the Crown Estate, with payments made two years in arrears. The Crown Estate’s 2025-26 annual accounts, published on Thursday, reported a net revenue profit of £487 million.
The Treasury confirmed that the recalculation of the Sovereign Grant Bill aims to ensure "a sustainable and proportionate funding framework going forward."
