The Free TV Licence for the over 75s

The row over the BBC's decision to scrap universal free TV licences for the over-75s has not only focused on the impact on those affected, but should a younger demographic (whose consumption of traditional TV continues to decline) be expected to pay for a service that the bulk of their older viewers (average age 62) get for free?

The Free TV Licence for the over 75s

How did this all start?

Free TV licences for the over-75s were introduced by Gordon Brown in his 2000 Budget, and subsidised by the government.

But in 2015 Conservative chancellor George Osbourne decided that the subsidy would be phased out by 2020, passing the problem over to the BBC who would be picking up an annual bill of £745m (if it maintained free licences for all over-75s).

Just to give that figure a bit of context, it is a fifth of their overall budget which it spends on making programmes for BBC2, BBC3, BBC4, BBC News, Local Radio and it's children's output. Naturally, this has caused much alarm at the corporation.

What's happening now?

Under the BBC's new rules, only low-income households where one person receives the pension credit benefit will still be eligible for a free licence. It estimates that its new proposal will cost it around £250 million per year, enabling it to avoid channel closures.

A look at population numbers casts an interesting light on the over-75s issue and the wider implications of that cost. National Statistics data show that in 2000 the UK had 4.37m people aged 75 and over. By 2020 the corresponding figure is projected to be 5.84m – an increase of 1.47m.

Over the next couple of months, TV Licensing will be writing to everyone who currently has a free over-75 licence to let them know about the new scheme and make clear that they will remain fully covered until 31 May 2020.

A free telephone information line will also be launched this month where older customers and their relatives can access information on the new policy and a new "pay as you go" payment scheme will be launched from June 2020 which will let people spread the cost in fortnightly or monthly payments.

Browse our library section

Great tips and advice you can download

Find out more

Follow us on Twitter

Copyright

© 2019 Lawrence Grant. All rights reserved. We use cookies on this website, you can find more information about cookies here.

Lawrence Grant

We are a member firm of the Institute of Chartered Accountants of England & Wales (ICAEW). Registered to carry on audit work in the UK and Ireland. Our Insurer is Prosure Solutions (per W R Berkley , and IGI), 34 Lime St, London EC3M 7AT (worldwide, excluding North America). Also an independent member of GGI, a multidisciplinary worldwide association of accountants, tax consultants & lawyers.