No one argues that the British monarchy is an expensive institution to support. Annual costs for the family and its retainers are over thirty million British pounds (forty million dollars). Yet numerous estimates put the income royals generate for the United Kingdom alone at over twenty-five billion pounds (thirty-four billion dollars) annually. Tourism, souvenir sales, and intangible 'goodwill' the Queen and her popular grandsons Princes William and Harry create account for this impressive financial figure.
Most of the direct costs of the monarchy are covered by the Sovereign Grant. Per its annual report, this paid 37.9 million pounds (fifty-one million dollars) for the year 2014-2015. It comes from annual income produced by the Crown Estate. Commonwealth countries also bear significant costs for the monarchy apparatus within their own countries, mostly coming from the Governor Generals' offices.
The Sovereign Grant
This grant is the means of transferring a percentage (typically fifteen percent) of the income from the Crown Estate back to the monarchy. This figure increased to twenty-five percent in 2017 so Buckingham Palace, the Queen's office and residence in London, could be repaired and renovated, with work to finish in 2027. This grant, which comes from property nominally owned by the Crown anyway, covers the majority of the public expenses of the monarchy in the United Kingdom.
It does not apply towards the costs for maintaining the monarchy's Governor General offices in the over fifty Commonwealth countries. These costs vary nation per nation but easily run in the millions of dollars annually. The four largest nations of the Commonwealth outside of Great Britain include Canada, Australia, New Zealand, and Papa New Guinea.
Canada's Governor General's office costs 50.5 million dollars annually, or $1.44 per Canadian resident. The Australian Governor General office costs run over 17.5 million dollars, around seventy-six cents per Australian. New Zealand has expenses of around thirteen million dollars for just over two dollars per Kiwi. None of these figures are breaking the bank, but they also do not include significant costs for royal state visits' security bills either.
Security costs are a major component of the costs of supporting the monarchy. Naturally, Britain pays for the majority of these as the Queen and her family live in the United Kingdom. As an example, HM Treasury paid an extra one million pounds (1.35 million dollars) in 2012 alone to cover the expenses associated with the Queen's Diamond Jubilee. Ironically Canada spent almost six times as much (7.5 million dollars) as Britain on the Diamond Jubilee.
The grant from the Crown Estate also pays for 431 out of 1,200 members of the household staff for 18.2 million pounds in 2014-2015 (around 24.5 million dollars). Many of these staff were for security. Total public costs for the monarchy were 42.8 million pounds sterling (or fifty-eight million dollars), amounting to about $1.08 per person in Britain. Keep in mind the souvenir sales from the Diamond Jubilee alone amounted to half a billion British pounds, or 675 million dollars, outpacing the extra public expenses for the Jubilee in Britain by a factor of five hundred to one.
It is difficult to quantify the income the monarchy brings in to Britain from tourist aspects, let alone in other Commonwealth countries. Visit Britain, the national tourism agency, claims the United Kingdom banks five hundred million British pounds annually from its tourism industry (675 million dollars). Media attention of the Royals brings tourists to particular destinations like the Tower of London, the most visited attraction in all of Britain in 2009 with 2.4 million visitors. St. Paul's Cathedral was second with 1.8 million tourists, and Buckingham Palace counted 420,000 tourists in the only eight weeks of summer it was open to visitors. Visit Britain claims 12.5 percent of the biggest United Kingdom attractions are associated with the monarchy. For 2009, of thirty million U.K. tourists, 5.8 million visited castles while 6.4 million visited religious sites (mostly associated with the monarchy).
Events and ceremonies royal family members attend in Commonwealth nations generate hundreds of millions of dollars in free publicity for those countries' tourism industries. The Diamond Jubilee caused a resurgence of interest in the royals worldwide, and over half a billion pounds (more than 675 million dollars) were sold in commemorative merchandise.
Second in popularity was the wedding of Prince William to Kate Middleton, now the Duchess Of Cambridge, in 2011. The royal wedding recorded an astonishing two billion watchers around the Commonwealth and world, as did the 2018 wedding of his brother Prince Harry to Meghan Markle, now the Duchess of Sussex. Around 360,000 tourists attended the 2011 festivities in central London. Retailers made small fortunes from selling souvenirs, specialized foods, and royal merchandise.
Monarchy's Private Income
Britain's treasury supports the official public costs of the royal household from the Sovereign Grant. This money mostly goes towards the maintenance of royal residences and castles, state visits, as well as royal travel, staff, official entertainment, and public engagements. The Queen also has her private income to draw upon for her considerable private expenses. This is mostly derived from the Duchy of Lancaster, her private trust holdings dating back 750 years. The Crown Prince has his even more valuable Duchy of Cornwall (the largest landholder in the United Kingdom) as well. The Queen also benefits from an annuity set by Parliament and an income from her private investments.
Regarding the Queen's private income derived from her considerable investment portfolio, consider the various estimates from Bloomberg and the Sunday Times. For 2015, Bloomberg Billionaires Index listed her at 425 million dollars. The Sunday Times Rich List in 2015 came up with an estimate of 460 million dollars. In 2012, the Queen received the singular honor of being listed in the Guinness Book of World Records as the richest queen in history. This was still only good enough for her to be the 302nd wealthiest individual living in the U.K. in 2015.
Duchy Of Lancaster
The private estate of Her Majesty is the Duchy of Lancaster. This is both a rural estates conglomerate of 18,484 hectares of land throughout England and Wales, as well as residential and commercial properties she owns throughout the nation. Most of these are found in Lancashire, Cheshire, Yorkshire, Lincolnshire, and Staffordshire. The Queen's duchy also counts an impressive portfolio of commercial property in the Savoy-Strand area of London. Finally, it boasts a lucrative financial investments portfolio, including several offshore banking investments held in the Cayman Islands and Bermuda.
These annual profits belong to the monarch alone and are paid into the Privy Purse to help offset her private and some official expenses. As of March 31st, 2015, this Duchy had a value of 472 million pounds (637 million dollars), delivering sixteen million pounds (around twenty-two million dollars) in annual income. The Crown Prince's Duchy of Cornwall was worth 728 million pounds (983 million dollars) and provided an annual income of 18.3 million pounds (around twenty-five million dollars) paid to Prince Charles.
These ancient organizations with their eyes firmly set towards the future maintain the core goal of providing growing and sustainable incomes from the historic hereditary inheritances year in and out, all the while preserving the estates' capital for future monarchs and Crown Princes of Wales.