In the 2024–25 tax year, the UK Treasury received over £500 million from the National Fund, a charitable trust established in 1927 by banker Gaspard Farrer to help pay off the national debt. This historic transfer follows a 2023 Court of Appeal decision affirming that the fund’s assets, primarily invested in gilts, should be directed to the UK Debt Management Office (DMO), an executive agency of the Treasury. The total amount of patriotic gifts to the government reached £585 million, a record sum, with 16 donors contributing, most of it from Ferrer’s fund.
The National Fund was originally set up anonymously with a £500,000 donation from Farrer, a former partner at Barings Bank, in the aftermath of World War I. The fund was intended to accumulate until it could pay off the national debt in full. However, due to the vast increase in the national debt over the years, the fund’s value has remained a small fraction of the total debt. In 2020, a High Court judge ruled that the fund could be used to reduce the national debt, rather than being distributed through charities, as it was closest to the original intention of the donor.
The recent influx of over £500 million from the National Fund provides a significant boost to Chancellor Rachel Reeves’ fiscal objectives, including her commitment to reducing public sector net financial liabilities as a share of GDP. Tax receipts also rose by 3.5% from the previous year to £858 billion. Despite the boost from these gifts, the Chancellor faces mounting pressure amid slow economic growth and high debt servicing costs, potentially necessitating tax increases.
The surge in donations to pay off the national debt has been notable since the COVID-19 pandemic. In 2021–22, seven donors gave a total of just £2,108. However, the Treasury’s take surged to £47,249 in 2022–23 from six donations and again in 2023–24 to £698,687 from six donations, the highest figure for 10 years.
The DMO declined to comment on the recent developments. However, experts suggest that ministers could apply the principles of patriotic gifts by introducing taxes for ringfenced purposes, such as funding the NHS, or to garner public support.
In conclusion, the £500 million received from the National Fund marks a significant contribution to reducing the UK’s national debt. While the amount is a small fraction of the total debt, it reflects a continued tradition of public generosity aimed at alleviating the nation’s financial burdens. The UK government faces ongoing challenges in balancing fiscal responsibility with the need for public services, and the use of such funds may play a role in shaping future economic policies.
