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The Treasury received more than £500mn to pay off Britain’s national debt in the last tax year from a fund set up by a banker almost a century ago for that purpose, in a boost to Chancellor Rachel Reeves’ aim to balance the books.
In the 2024-25 tax year the UK Debt Management Office received the assets of a fund created in 1927 by Gaspard Ferrer, a former partner of Barings bank, to clear government debt, people familiar with the matter said.
In 2023, the Court of Appeal upheld a 2022 ruling by London’s High Court, which decided that the assets of Ferrer’s “National Fund” should be transferred to the DMO, an executive agency of the Treasury.
The fund, which was originally set up anonymously, had invested in assets including gilts and was valued at more than £500mn.
Figures released by the DMO after a freedom of information request and seen by the Financial Times showed the Treasury received a record £585mn in so-called patriotic gifts in 2024-25. The sum was gifted by 16 donors, with the vast majority coming from Ferrer’s fund, according to the people familiar with the matter.
“It is generosity of a level that the chancellor could not have expected,” said Chris Etherington, partner at RSM, the accountancy firm that submitted the request. The DMO did not reveal the identities of the 16 donors.
The practice of making gifts to the state to help reduce the national debt dates to the Napoleonic wars of the early 1800s. In the wake of the first world war, UK national debt stood at 171 per cent of GDP in 1927-28, according to official figures, compared with 96 per cent of GDP in April this year.
Reeves has vowed to meet a self-imposed rule of public sector net financial liabilities, her preferred measure of public debt, falling as a share of GDP by the end of this parliament. Unveiling her Spending Review on Wednesday, the chancellor said her self-imposed fiscal rules were non-negotiable, describing them as the “foundation of stability and investment”.
Donations to pay off the national debt have soared since the Covid-19 pandemic. In 2021-22, seven donors gave a total of just £2,108, according to the FOI request.
But 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 patriotic gift figures come as Reeves set out the government’s day-to-day and capital spending plans for the coming years. There are growing expectations that Reeves could be forced to increase taxes again in the Autumn Budget, as economic growth is forecast to slow and the cost of servicing government debt remains high.
RSM’s Etherington said “one of the clear challenges with raising tax receipts is that it is difficult to obtain public support for them, with a potential lack of trust over how these funds will be spent”.
Ministers could apply the principles of patriotic gifts by introducing taxes for ringfenced purposes, such as funding the NHS or the armed forces, he added.
In Reeves’ review, both the NHS in England and defence received big boosts, while many Whitehall departments face real-terms cuts as the chancellor seeks to keep tight control of the public finances.
HM Revenue & Customs, the tax authority, collected £858bn in taxes on behalf of the Treasury in 2024-25, up by 3.5 per cent from 2023-24.
The DMO declined to comment.
Additional reporting by Valentina Romei in London
