How much does the royal family cost? Where the royals get their money, and how much the UK taxpayer spends on them

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The Duke and Duchess of Sussex have said they want "financial independence" from the Royal Family as part of their announcement that they will be stepping back as senior royals.

The bombshell declaration came just seven months after it was revealed that £2.4m of taxpayer-funded costs was used to pay for renovations on the home of the Duke and Duchess of Sussex.

(Photo: Ben A. Pruchnie/Getty Images)

(Photo: Ben A. Pruchnie/Getty Images)

Frogmore Cottage in Windsor was converted into a single residence from five separate houses ahead of the couple moving in and before the birth of their son Archie.

But how was that all paid for? And who actually pays for the Royal Family in the first place? Will Harry and Meghan truly be financially independent once they've broken away?

Here's everything you need to know:

What is the Sovereign Grant?

The Sovereign Grant is a portion of money that funds the Royal Family.

The Grant was launched in 2012 - replacing the previous, more complicated funding system - and covers travel, communications and the maintenance of royal palaces. It allows the Queen and other members of the family to carry out their official duties.

The grant - worth £82.2m in 2018-19 - is funded by the Treasury, with around 15 per cent coming from the profits of the Crown Estate.

The Crown Estate is run by an independent board and includes land such as Regent Street in London and Ascot Racecourse. Profit from the estate is paid to the Treasury.

How much do the Royals cost the taxpayer?

The core grant, based on this 15 per cent figure, was £49.3m for the year 2018-19, up £3.6m on the previous year.

And from 2017-18, the Sovereign Grant was increased to 25 per cent in order to help cover the £368m costs of updating Buckingham Palace.

This means that the total amount for the 2018-19 year, taking into account the £32.9m increase, stood at £82.2m.

At the end of the year, any unused money in the Sovereign Grant is moved into a reserve fund, which is also used to help pay for the palace upkeep.

The royal accounts state that the Queen’s expenses for 2018-19 were £67m, so this year, £15.2m is being put into the reserve.

In the same year, the Crown Estate provided £343.5m to the Treasury, which was an increase of 4.3 per cent on the year before.

This means the 2020-21 grant is expected to be set at £85.9m.

Will Harry and Meghan really be financially independent?

At this point it is not entirely clear just how independent the Duke and Duchess will be when it comes to their finances, and if they are completely independent, nobody seems quite sure just how they will manage it.

It is thought that Harry has a net worth of around £30m, largely made up of his inheritance from the Queen Mother, who died in 2002, and his own mother, Diana, Princess of Wales, who died in 1997.

Meghan is also likely to have a substantial personal wealth owing to her previous career as a high-profile actress.

While the exact figure is unknown, it has been said that she earned six figures per series of US legal drama Suits, which she starred in for seven seasons.

Their website says Harry and Meghan "value the ability to earn a professional income, which in the current structure they are prohibited from doing.

"For this reason they have made the choice to become members of the Royal Family with financial independence."

But Harry and Meghan suggested they would still receive security, funded by British taxpayers.

Referring to armed security by the Metropolitan Police mandated by the Home Office, Sussexroyal.com said: "The Duke and Duchess of Sussex are classified as internationally protected people which mandates this level of security."

Non-senior royals, which is what the couple seek to be, do not have full-time royal protection officers.

The undisclosed cost of guarding the royal family as a whole is estimated to be more than £100m a year.