The Queen is set to feel the pinch of the economic downturn as she faces a pay freeze until 2015.
The royal household is set to see six consecutive years of funding cuts -- affecting the Queen's income, which has dropped in real terms since 2009.
The austerity measures mean the monarch's royal palace repairs will most likely be halted.
Feeling the pinch: The Queen will have to face six years of funding cuts, which will put a dent in her plans for repairing the royal palace. pic/afp
And any extra taxpayers' money previously used to fund the court of the Duke and Duchess of Cambridge, will also no longer be available.
The Prince of Wales will be responsible for the costs of providing staff for the Duke and Duchess of Cambridge, until Charles becomes king.
While the Queen won't see a pay rise until at least 2015 following the replacement of the civil list with the sovereign grant.
The monarch's funding is now linked to profits at the Crown Estate instead of taxpayers' money paying for royal travel and royal palaces.
The Queen's funding will now equal 15 per cent of the profits made two years previously by the Crown Estate, under the new law which was passed six weeks ago.
The Crown Estate includes Regent Street, Windsor Great Park and over 50 per cent of the UK's shoreline. Chancellor George Osborne has imposed the freeze on the Queen's taxpayer funding -- setting payments at �30 million (Rs 240 crore) per year until April 2013.
But she will receive a further one-off payment to fund the cost of the diamond jubilee.
In stark contrast, she received �77.3 million (Rs 613 crore) from taxpayer funding in 1991-92.
The Prince of Wales' income comes from the Duchy of Cornwall which not only supports the court of William and Kate, but also Prince Harry and his future wife and family.
Although Charles is paying for William and Kate's staff at Kensington Palace, structural work will still be funded with taxpayer money.
'Brutal' Duke reduced Queen to tears The Queen was reduced to tears by the Duke of Edinburgh's "brutal" behaviour towards her when she refused to take his surname of Mountbatten, according to a new biography. Sally Bedell Smith even suggests that the 10-year age gap between the Princess Royal and the Duke of York was the result of "Philip's anger over the Queen's rejection of his family name". Her book Elizabeth the Queen details the Duke's irritation over the monarch's decision to keep the family name Windsor.