The government is set to benefit from a gift of more than £600m after a charity set up nearly 100 years ago to pay off the national debt was made to transfer its assets and now plans to close.
This week, the UK Debt Management Office (DMO) announced that a £607m gilt would be cancelled due a donation received from the National Fund, a charity set up in 1928 to pay off the national debt.
The DMO received a “significant transfer” to its donations and bequests account from the National Fund in 2024-25, its accounts show, including £585m of cash, the vast majority of the charity’s assets.
This transfer followed a Court of Appeal ruling in 2023, which stipulated that the National Fund’s assets should be sent to the Treasury rather than other charities.
According to the National Fund’s latest accounts, belatedly published in December, it now plans to close following the assets transfer.
“In line with the judgment, the fund will cease to operate and all assets (less funds to meet final expenditure) to the National Debt Commissioners,” the accounts read.
“The intention is that the charity will be wound up once the remaining expenses have been paid.”
Failed appeal
The National Fund was set up in 1928 with a £500,000 donation, revealed in 2021 to have come from banker Gaspard Farrer, with the aim of paying off the UK’s national debt following the First World War.
Other philanthropists contributed to the fund but it has not received any donations since 1985.
Following research into the fund by Civil Society, the Labour Party pushed the government to make the money available to other charities.
However, the attorney general brought a case in 2018 to argue that its assets should be transferred to the Treasury instead to align with its original purpose to pay off the national debt.
In 2023, the Court of Appeal noted, as had a previous High Court case, that the fund’s assets could be put to more “suitable and effective” purposes by being transferred to charities.
However, it said this was outweighed by the fact that transferring the money to the Treasury was more in “the spirit of the original gift” and that doing so would ensure the money “is applied for charitable purposes which are close to the original purposes”.
Public sector net debt was £2.77tn at the end of October 2025, according to Office for National Statistics.
