What it means for Prince Harry and Meghan Markle to be financially independent

Janet Nguyen Jan 9, 2020
Prince Harry and Meghan Markle, Duchess of Sussex, wave as they leave Windsor Castle after their wedding to attend an evening reception at Frogmore House. Steve Parsons - WPA Pool/Getty Images

What it means for Prince Harry and Meghan Markle to be financially independent

Janet Nguyen Jan 9, 2020
Prince Harry and Meghan Markle, Duchess of Sussex, wave as they leave Windsor Castle after their wedding to attend an evening reception at Frogmore House. Steve Parsons - WPA Pool/Getty Images

Prince Harry and Meghan Markle, the Duchess of Sussex, have announced they’re stepping back as senior members of the royal family and plan to become “financially independent.”

“After many months of reflection and internal discussions, we have chosen to make a transition this year in starting to carve out a progressive new role within this institution,” the Duke and Duchess of Sussex wrote in an Instagram post and press release on Wednesday.

“It’s unprecedented. We are entering totally new territory on this matter,” said David McClure, a royal finance expert and author of the book “Royal Legacy.”

Harry and Meghan’s decision to step back as senior royals comes amid months of mounting public scrutiny. In a recent ITV documentary, Markle opened up about the media pressure she felt in her newfound position, especially as she started her family.

Meanwhile, Buckingham Palace has told the BBC that it’s “disappointed” by their decision and released its own statement.

“Discussions with The Duke and Duchess of Sussex are at an early stage. We understand their desire to take a different approach, but these are complicated issues that will take time to work through,” the statement read. A palace source also told the BBC that senior members of the royal family felt “hurt” by their announcement and that no members of the royal family were consulted.

With their new “financial independence,” the Sussex Royal website states that they will “no longer receive funding through the Sovereign Grant.”

The Sovereign Grant, one of several revenue streams for the royal family, is the government’s annual payment to the monarch for official duties, and is funded by taxpayers. Beginning in 2019, 5% of funding for the Duke and Duchess of Sussex’s official office had been provided through that grant.

Under their current financing structure, Harry and Meghan had also been prohibited from earning “any income in any form” or financially benefiting from their charity work.

The Royal Household published its latest financial statement in June of last year, showing that the Sovereign Grant for 2019-20 is £82.4 million (about $108 million) — a slight uptick from the £82.2 million it received in 2018-19.

The other 95% of funding for that office comes from Prince Charles’ private estate, the Duchy of Cornwall.

McClure said Prince Charles allocates about £5 million a year to pay for the public duties of Harry, Meghan, William and Kate altogether.

Harry has also received half of Princess Diana’s estate, amounting to about £7 million, and trust money from the Queen Mother, Elizabeth Bowes-Lyon (his great-grandmother).

The BBC reported back in 2002 that Princes William and Harry would share about £14 million from the Queen Mother’s estate, but that the bulk of that money would go to Prince Harry “since William will benefit financially by becoming king.”

Plus, Meghan has previously raked in plenty of money through her roles in film and TV, like the long-running USA show “Suits” (she reportedly earned $50,000 an episode), and $80,000 worth in annual sponsorships and endorsements.

“Even if they lose all public finance, there’s a lot of family money around, there’s a lot of trust money around, and also they have a lot of very rich friends,” McClure said. “I don’t think they’re going to be roughing it.”

And despite the announcement that they will cut ties with the Sovereign Grant, the Sussex Royal website says their “official overseas visits” will be paid for by the grant, they’ll continue to use Frogmore Cottage as their official residence (which they received $3.05 million in taxpayer funds to renovate), and they’ll also keep the security provided to them by the Metropolitan Police.

No official figures for the cost of their security are available, which McClure said the government has always refused to give.

“The reason why they say they won’t give a figure is ironically for security reasons,” he noted. For example, if the budget went down a certain percentage, that would indicate that their security had weakened.

But McClure said it is “widely suspected the total security costs of the royal family are far in excess of £100 million a year.”

Other royals who have attempted to generate their own independent streams of income include Edward VIII, who abdicated the throne in 1936 to marry the divorced American socialite Wallis Simpson.

“He famously made quite a bit of money in the ‘50s writing his memoirs,” McClure said.

In more modern times, McClure pointed out that Sarah, Duchess of York, has generated money through TV appearances, which Harry and Meghan could pursue — along with public speaking engagements.

Cele Otnes, a marketing professor at the University of Illinois at Urbana-Champaign, noted that Harry and Meghan have recently trademarked over 100 items (which include clothing and stationery).

“So it’s possibly they can create their own line of particular types of products,” Otnes said. “In this case, we’re seeing a heritage brand deliberately separate itself, pun intended, from the mothership.” 

She said that it’s hard to go wrong with marketing products or services that have any kind of association with the royal family, since consumers love both the “tackier stuff” and the high-end goods and services.

“But that’s as long as there’s some kind of actual reference to someone in the royal family,” Otnes added. “I don’t doubt because they’ll have to start thinking like marketers. Who is their target audience going to be? What are they going to be trying to portray?”

To learn more about the royal family’s finances, click the audio player for a conversation between the BBC’s Victoria Craig and Jonny Dymond.

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