The BBC is to axe millions of free TV licences for the elderly, ending the blanket exemption – and restricting the free licence to over-75s on Pension Credit.
In what BBC Chairman Sir David Clementi called “the fairest and best outcome,” the broadcaster has announced its final decision which will come into force in June 2020.
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- BBC warns channels may close without an over 75s licence fee
- BBC licence fee to rise by £4 from April 2019
TV viewers over 75 currently receive a free licence regardless of income, but the new policy will mean that millions more pensioners will now have to pay the licence fee.
Under the new rules, any household with someone aged over 75 who receives Pension Credit will be eligible for a free TV licence. BBC Director-General Tony Hall has estimated that 1.5 million households could still qualify.
What is Pension Credit?
Pension Credit is a top up for people with low weekly incomes who are over the state pension age. It is a non-taxable sum.
It is split into two parts – Guarantee Credit and Savings Credit. Guarantee Credit tops up weekly income – if you’re single, you qualify if your weekly income is less than £167.25. If you’re in a couple, that qualification mark is £255.25/week.
Savings Credit is an extra payment that goes to people who saved money ahead of retirement – eg a pension.
The new ruling follows a consultation with 190,000 people, which showed that 52% were in favour of either reforming or abolishing free licences.
“Linking a free licence for over 75s to Pension Credit was the leading reform option,” Clementi said. “It protects the poorest over 75s, while protecting the services that they, and all audiences, love. It is the fairest and best outcome. It is one we can implement and endorse. This is an outcome that is the fairest possible in difficult circumstances.”
In 2015, the government announced that it was passing responsibility for funding the free over-75 licence fee to the BBC.
This was expected to cost the corporation £745 million by 2021/22 – a fifth of the BBC’s budget, and equivalent to what it spends in total on BBC2, BBC3, BBC4, the BBC News Channel, and children’s channels CBBC and CBeebies.
The BBC warned in November 2018 that it would be forced to cut programmes and services if the current scheme was maintained beyond that 2020 cut-off point.
BBC Director-General Tony Hall said: “This has not been an easy decision. Whilst we know that pensioner incomes have improved since 2000, we also know that for some the TV Licence is a lot of money.
“I believe we have reached the fairest judgement after weighing up all the different arguments. It would not be right simply to abolish all free licences. Equally it would not be right to maintain it in perpetuity given the very profound impact that would have on many BBC services.”
“The new scheme will cost the BBC around £250 million a year depending on take-up,” the BBC said in a statement. “Had the BBC copied the Government’s scheme, the extra costs on top of around £500m would have meant unprecedented closures.”