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Harry and Meghan are seen with Queen Elizabeth at the Queen's Young Leaders Awards Ceremony at Buckingham Palace in June, 2018.John Stillwell/The Associated Press

Prince Harry has spoken for the first time about his “great sadness” at breaking from the Royal Family and insisted he and his wife, Meghan, were not “walking away” from Britain.

“The U.K. is my home and a place that I love. That will never change,” Harry said in a speech on Sunday night at a charity event in London. Saying he wanted people to hear the truth from him “not as a prince or a duke, but as Harry,” he spoke about Meghan and how she shares his values. When they married, “we were excited, we were hopeful and we were here to serve. For those reasons, it brings me great sadness that it has come to this,” he added.

He also said talks about the couple’s desire for more independence from the royal household had gone on for months and came after “so many years of challenges.” And while they wanted to continue performing some royal duties, without public funding, “unfortunately that wasn’t possible.” He has accepted the outcome, “but I hope that helps you understand what it had come to, that I would step my family back from all I have ever known, to take a step forward into what I hope can be a more peaceful life.”

Harry’s speech caps a tumultuous week that has shaken the Royal Family, divided the country and raised new questions about how the couple will make a living.

The Queen announced on Saturday that the Duke and Duchess of Sussex will step away from royal duties as of this spring. The couple will also forgo all public money and they’ll start paying rent on the use of Frogmore Cottage, a five-bedroom home near Windsor Castle. They’ll also repay the government the £2.4-million, or $4-million, that was spent refurbishing the house for them in 2018.

While they will remain duke and duchess, they will stop using the titles His Royal Highness and Her Royal Highness “as they are no longer working members of the Royal Family,” the Queen added.

The Royal Family will be hoping that the deal will help end a simmering rift in the household that has seen Harry and Meghan plead for more freedom and make plans to move part-time to Canada. But the agreement, which is reviewable in a year, has already raised fears that it has damaged the Royal Family’s credibility and that it could lead other young royals to pull away.

“Harry has taken a wrecking ball to the reputation of the Royal Family,” royal historian Christopher Wilson said in an interview. “All this that’s happened should have happened behind closed doors. ... But the royals weren’t able to manage it and so therefore they have been damaged. But in the end it is Harry that has caused this great disaster and he must take full responsibility for it.”

The couple has indicated that they plan to launch a charity and they’ve registered trademarks in Britain for “Sussex Royal The Foundation of the Duke and Duchess of Sussex.” There have been reports that they plan to model their activities along the lines of former U.S. president Barack Obama. That will be a tall order.

Mr. Obama’s foundation raised US$164-million in 2018, which funds programs that promote public service around the world.

“I think [Harry and Meghan] are both far too naïve and unworldly to be able to achieve that,” Mr. Wilson said. “Obama is a very sophisticated operator, a man of the world. Harry, by comparison, has lived a sheltered existence surrounded by servants and I don’t think he has the first clue how to raise any money outside the royal context.”

Historian Robert Lacey, who is a consultant to the Netflix series The Crown, disagreed.

“This now leaves them free to pursue causes that might be considered controversial or political in British royal terms,” he said in an interview. “I would have thought they could create a new source of philanthropic initiative that is separate and independent of the Royal Family but not antagonistic to it. We’re looking at a new sort of partnership.”

The couple can at least count on financial support from Harry’s father, Prince Charles. Media reports indicated Charles will continue to fund Harry and Meghan with money from the Duchy of Cornwall, an entity set up in 1337 for the heir to the throne, which now has about £1-billion in assets and is headed by the Prince of Wales. Harry receives around £2.5-million annually from the Duchy and some funding will continue. However, it’s not clear who will pay for the couple’s security costs, which are estimated at around £600,000 annually.

While Meghan has an acting career to fall back on, Harry is losing his ties to the military. He did two tours of Afghanistan with the British Army and earned the rank of captain. He now has to drop all military associations, including serving as the ceremonial head of the Royal Marines.