It seems like all British royal family members — especially Queen Elizabeth II and a few Dutch aristocrats — might have to tighten their belts for the time being.
The royals have been dealing with significant financial issues, according to recent reports from the Duchy of Lancaster, which is the estate that covers the royal family’s office expenses.
The Duchy of Lancaster made £23.2million (30million United States Dollars) in 2019, thanks to their massive portfolio of lands, properties, and assets.
However, a significant portion of their wealth was destroyed by the coronavirus pandemic and its impact on global economics.
Moreover, it is now under a major question mark how the family is going to pull through the situation in the future, and what kind of reductions they might have to do to their budget in order to make it.
The Duchy of Lancaster has lost a lot of money because the pandemic made it impossible for tourists to visit royal residences. And many of the buildings owned by the estate have tenants and business owners who cannot pay rent.
It is worth noting that the money that was reportedly wiped out was not actually in the form of any cash reserves.
Rather, the value of certain properties owned by the royal family has been going down significantly as a result of the pandemic, and it is not clear if it is ever going to regain its footing either.
It is interesting to follow the situation from a financial perspective, not just for active followers of the royal family but for most people around the world.
Reports indicate that more than half of the family’s income is tied to commercial properties, which might start deteriorating in profitability in the coming months/years if the current situation continues as it is.
The Queen and her financial team are searching for ideas to generate income in this new era where everything is virtual.
Nathan Thompson, the Duchy Council chief executive, and the clerk said the financial situation would get worse in the upcoming month.
He revealed: “Although these results include only one week of the Covid-19 outbreak, the pandemic has had an early impact on capital values. The fall of 1.8 percent in net asset value is largely due to a deterioration in the value of our financial portfolio following market reaction to COVID-19. We also recognize that, while it is too early to predict the eventual outcome, many of our tenants’ businesses will be adversely affected, particularly those in the leisure and retail sectors.”
Thompson went on to say that 2021 will be a challenging year for the queen and her offsprings. He added: “Next year is, therefore, likely to present significant challenges. However, by controlling costs carefully, being prudent with our capital expenditure and working collaboratively with our tenants, we believe we can protect the portfolio while continuing to support the most vulnerable in our communities.”
Many royal fans say it is not like the family is struggling for survival. The reductions that they might have to do to their budget are likely not going to affect their lifestyle all too significantly because they amassed an impressive wealth over centuries.
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