How the Royal Family Makes Money—And Keeps The Lights On At Buckingham Palace
The royal family gets paid through a mix of public and private funds.
The Queen's net worth fell to $460 million in 2020, according to UK newspaper The Sunday Times.
According to Oprah's interview with Prince Harry and Meghan Markle, the couple were "cut off." Here's how they, and the royal family, make their money.
In The Crown season 3, episode 4, Tobias Menzies's Prince Philip gives an interview to NBC's Meet the Press. In it, he addresses the royals' rumored money problems and the fact that the queen hadn't had a "pay raise" in almost 18 years (this interview actually took place in November of 1969, two years after his mother, Princess Alice, moved into Buckingham Palace).
In the real-life program, host Lawrence Spivak cited a London news report and asked Philip, "it goes on to detail the very high cost that the royal family must sustain on an allowance of one million one hundred thousand dollars a year. Is that creating an awkward situation?"
"Very," Prince Philip replied. "We go into the red next year." As to whether they'd had to shutter any of their estates, Philip said, "No, not altogether. We've closed down...well for instance, the queen had a small yacht that she had to sell. And I should probably have to give up polo fairly soon." At the time, Philip's remarks provoked ill will from the British public, who failed to share his view that selling a yacht counts as a financial hardship.
The question of where and how the royals get their money resurfaced following Prince Harry and Meghan Markle's interview with Oprah which aired on March 7 (though you can still watch it). Harry revealed to Oprah that "my family literally cut me off financially" after he and Meghan announced their official exit as senior members of "the Firm." The royal family's "salaries" had last made headlines in November 2019, following unconfirmed reports that Prince Andrew, Queen Elizabeth's second-youngest son, would forego his annual payment of roughly $300,000 after stepping back from public duties for the foreseeable future amid a cloud of scandal.
So what are the royal family's salaries, how do they earn them, and where does the money come from? What's the Queen's net worth, and how are Meghan and Harry making money now? Here's what we know, including how these funds costs the average taxpayer in England.
How much does Britain pay the royal family?
As with most things royals-related, the answer is complicated. The royal family is paid through a mix of public and private money—that's on top of net worths that include inherited wealth, a significant real estate portfolio, and other assets. Most of Queen Elizabeth II, Prince Philip, and their children's annual income and expenses are paid through three sources: the public Sovereign Grant, and the private Duchies of Cornwall and Lancaster.
The Sovereign Grant
Since 2012, the queen's official duties, and the costs involved in maintaining the occupied palaces, have been paid for by a government-administered annual lump sum called the Sovereign Grant. According to the British monarchy's official site, "funding for the Sovereign Grant comes from a percentage of the profits of the Crown Estate revenue." The Crown Estate, as CNN Money explains, can be roughly defined as "a collection of U.K. properties and farms that generate hundreds of millions of pounds each year."
These lands were first surrendered by George III back in 1760, to be managed by the Treasury going forward. The Crown Estate technically belongs to the reigning monarch, but as their site clarifies, "it is not the private property of the monarch —it cannot be sold by the monarch, nor do revenues from it belong to the monarch." It's presently overseen by an independent organization's board.
In the 2018-2019 fiscal year, the total Sovereign Grant amount was 82.2 million pounds (that's nearly $106 million in American dollars). Neither the queen nor her family are raking that total in, though: 32.9 million pounds of that were allotted for "Reservicing of Buckingham Palace," and it also covers the royal family's duty-related travel expenses, payroll, and other staff costs, and literally keeping the lights on.
The Sovereign Grant replaced the Civil List and three Grants-in-Aid for travel, communications, and palace maintenance. Until it was abolished in 2012, the Civil List was an annual amount the government used to give the queen to cover her duties as Head of State and Head of the Commonwealth, and Grants-in-Aid from government departments that previously paid for royal duties-related travel and upkeep of royal residencies.
The Privy Purse and the Duchy of Lancaster
If the Sovereign Grant is an expense account of sorts, the Privy Purse includes the queen's actual income (her estates are also considered included in the Privy Purse). The queen's income is drawn from the Duchy of Lancaster, which is a portfolio of land, property and assets held in trust for the reigning sovereign. In 2018, the Privy Purse received nearly 20 million pounds (about 26 million U.S. dollars) in income from the Duchy of Lancaster.
While the Queen and Prince Philip use part of this money to cover additional expenses, Elizabeth also draws from it to pay her children Prince Andrew, Prince Edward, and Princess Anne a salary for their schedule of royal engagements around the world.
The Duchy of Cornwall
Established in 1137, the private estate "funds the public, charitable, and private activities of the Prince of Wales and his family," its site says. It consists of land and properties in 23 English counties, and a portfolio of investments. While Prince Charles's siblings are paid through the Duchy of Lancaster, most of Prince Charles and Camilla Parker Bowles's income is from the Duchy of Cornwall—90 percent, according to CNN Money. Prince Charles pays Prince William and Kate Middleton, and formerly Prince Harry and Meghan Markle, through revenue surplus from the Duchy of Cornwall.
In the 2019-2020 fiscal year, Charles and Camilla received nearly 22.2 million pounds (about $30 million American dollars) in income from the Duchy of Cornwall, and almost 2 million pounds of funding from the Sovereign Grant allotted to subsidize their official royal activities. "The majority of staff and official and charitable work, including the official offices of The Duke and Duchess of Cambridge and The Duke and Duchess of Sussex activity, are paid for from His Royal Highness’s private income from the Duchy of Cornwall," their annual review states. In the 2018-2019 fiscal year, Charles and Camila undertook 638 social engagements in 14 countries. From 2019-2020, they "undertook 580 engagements" in the U.K. and abroad.
Today, the Duke and Duchess of Sussex—aka Harry and Meghan—are not senior working royals and no longer receive Duchy funds. Prince William and Kate Middleton, the Duke and Duchess of Cambridge, still receive at least several million from the Duchy annually.
The Queen's net worth fell in 2020.
It may surprise you to know that while the queen is the richest member of the royal family, she isn't a billionaire. Somehow, she makes do.
In 2020, the Queen's net worth reportedly dipped by 20 million pounds from the previous year, according to the annual Sunday Times Rich List. The paper values her current net worth as 350 million pounds, or roughly $486 million USD.
In 2019, Forbes had assessed the Queen's net worth as equal to least $500 million USD. Per the Crown Estate's annual report for 2019/20, the value of the British royal land portfolio fell by 1.2 percent to £13.4 billion in 2020 due to the Covid-19 lockdown impacting tourism and retail in particular.
That downward trend is likely to continue. "Whilst it is far too early to accurately forecast our performance for the 2020/21 financial year, we do expect our net revenue profit and property valuations to be significantly down," the report added.
By reports, Her Majesty is notoriously frugal. "Newspapers are shredded for horse bedding, parcel string is reused, frayed sheets and dusters are darned," the Sunday Times writes in regards to Buckingham Palace housekeeping.
Harry and Meghan were "cut off" and live off his inheritance from Princess Diana.
In the January 2020 announcement of their intention to step back from royal duties, Prince Harry and Meghan Markle stated a desire to "work to become financially independent." In September 2020, Newsweek confirmed that Prince Harry was no longer receiving funds via the Duchy of Cornwall. That same month, the couple also announced that they'd paid back the £2.4 million in public money taken from the Sovereign Grant that was used to renovate their Windsor Home, Frogmore Cottage.
But in their sit-down interview with Oprah, Harry and Meghan revealed they'd actually stopped being paid in the first quarter of 2020—much earlier than discussions about their departure had led them to believe. "My family literally cut me off financially, and I had to afford security for us,” Harry said, voicing concerns for their son Archie's safety without the security detail the royal family had revoked.
Harry says they'd been living off of his share of the inheritance his mother, Princess Diana, left to him and his brother William after her death in 1997. According to The Independent, after taxes, the half that Harry received upon turning 25 amounts to around $13 million USD. "Without that, we wouldn't have been able to do this," Harry said, suggesting their move to a new home in California was made possible thanks to those funds.
Harry and Meghan inked what's believed to be a very lucrative Netflix deal, estimated to be worth between 100 and 240 million in U.S. dollars (the streaming platform hasn't confirmed a sum). They also produce a podcast in a deal with Spotify, and Oprah and Harry are producing a docu-series on mental health for Apple TV+. Initially, "the Netflix and the Spotify of it all weren't part of the plan," Harry told Oprah in the interview.
These revenue streams are in addition to Markle's own money from her previous career as an actress—in her days on USA drama Suits, she earned a reported salary of about $450,000 in addition to endorsements and related income. While it's an unconfirmed number, a February 2020 Forbes report estimated Harry and Meghan's net worth at about $10 million.
Castles, stocks, and stamps
The queen's got assets, obviously. In addition to her personal portfolio of investments and a sweet stamp collection, Elizabeth inherited Balmoral and Sandringham Estates from her father. The queen couldn't hock a tiara or two if times got tough, however—she doesn't technically own the Crown Jewels, the royal residences, or most of the Royal Art Collections. Those must be passed on to the next sovereign (so they'll remain in the family, obviously).
And again, any income that trickles down to Elizabeth's children and grandchildren from the Duchies is on top of their own inherited wealth.
Does the Queen pay taxes?
Yes. The queen has voluntarily paid income tax and capital gains tax since 1992; any income received from the Duchy of Lancaster that doesn't go to official expenses is taxed as well. She's subject to Value Added Tax also voluntarily pays local taxes.
What does paying the royals cost British taxpayers?
Out of pocket? Honestly, not much—collectively, that is. In 2018, it cost each average British taxpayer about 65 pence a year, according to Fast Company. So less than a dollar. Even with the cost spiking by 41 percent in 2019 per Business Insider, the individual taxpayer still pays cup-of-coffee money. An artisanal, organic cup of coffee.
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