The Sovereign Grant – used to fund the monarchy’s official duties – will be 12% of the Crown Estate’s net profits next year, down from 25%, the Treasury has announced.
The change has been introduced following a significant boost in the Crown Estate’s profits from offshore wind deals.
The Treasury said the Royal Household’s budget will be £24 million lower next year and £130 million lower in both 2025 and 2026, than if the rate remained at 25%.
The total Sovereign Grant for 2024/25 will remain flat at £86.3 million.
The King asked in January for the wind farm profits to be used for the wider public good instead.
The reduction came out of a review by Royal Trustees, which was published on Thursday, and sets out the new proportion of the Crown Estate’s net profits used to calculate the amount of Government funding to support the King.
Prime Minister Rishi Sunak, Chancellor Jeremy Hunt and Keeper of the Privy Purse Sir Michael Stevens are the royal trustees.
The Treasury said: “Cutting the rate to 12% is expected to reduce the Sovereign Grant by £24 million in 2024/25, compared with the rate staying at 25%, and over £130 million lower in each of 2025 and 2026.
“This money will instead be used to fund vital public services, for the benefit of the nation.”