How much does the TV Licence cost and is it going up?

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  • If you watch ‘live’ TV then you need to have a licence. But how much does the TV Licence cost and can you get one for free? The cost of a TV Licence is an unavoidable expense for many of us. The cost of living crisis means that most households are looking for ways to save some money. But there are certain outgoings that are difficult to remove entirely, such as the TV Licence.

    However, not everyone actually needs a TV Licence, while some qualify for a lower price. The rules are fairly straightforward when it comes to whether a TV Licence is required; if you watch or record ‘live’ TV on any channel, then you will need to have a licence.

    But what does live TV mean? Essentially, it doesn’t matter what that channel is; so long as you watch it as it’s being broadcast, a licence is required. This covers anything shown on the actual channel, rather than being specifically broadcast live. This means it includes channels like ITV+1 and Dave Ja Vu.

    Importantly, you need a TV Licence whether you own or rent your home.

    How much does the TV Licence cost?

    The cost of the TV Licence varies based on the device you’re using for watching programming. For most devices, the TV license costs £159 – however, if you’re watching on an old black and white TV set then the licence costs £53.50 each year.  It’s important to bear in mind that a TV Licence is required even if you don’t actually use a regular TV.  If you watch programming on your phone, laptop or another portable device – you also need a £159 licence. The crucial element here is what you watch, not how you watch it.

    The TV Licence is only valid for a year, so you will need to renew your licence every 12 months. Failure to do so is a serious offence; you could end up facing a £1,000 fine for failing to have a valid TV Licence in place.

    Are TV Licences going up?

    The price of a TV Licence is not going up ‒ yet. Because of the way that the BBC is funded, the government and the national broadcaster negotiate funding settlements every four years. Part of that negotiation covers the pricing of the TV Licence.

    In January 2022 the Culture Secretary, Nadine Dorries, announced that the price of the licence was being frozen at £159 until 2024, following that latest round of negotiations.

     

    However, from this point onwards the price of the TV Licence will start to increase once more. For the four years after 2024, the TV Licence cost will increase annually in line with inflation.

    While the rate of inflation can change, under its existing estimates for how the economy will perform in the coming years, the government believes this will mean an increase of around £3.50 in 2024 to £162.50. Then, by the final year of this pricing settlement, the TV Licence will come to less than £175.

    Who is eligible for a free TV Licence?

    If you are over 75 and receive Pension credit, you are eligible for a free TV license. Other people can qualify for a reduced price on their TV Licence. For example, if you are blind ‒ classed as being severely sight impaired ‒ then you may qualify for a 50% reduction in the cost of your TV Licence. At the current rate, this would mean a normal colour licence would set you back £79.75. If you are partially sighted, then you will not qualify for the discounted rate.

    Residents of care homes, supported housing or sheltered accommodation may qualify for a concessionary TV Licence. This is known as an ‘accommodation for residential care’ (ARC) licence, and costs £7.50 per room, flat or bungalow.

    There is no discount if you are on benefits or Universal Credit.

    It used to be the case that everyone aged 75 or over qualified for a free TV Licence each year. But that changed back in 2020. Now, you only get a free TV Licence if you are over 75 and in receipt of Pension Credit.

    Pension Credit is a form of benefit offered to older people on low incomes. It can top up your weekly income to £182.60 if you’re single, or £278.70 as a joint income between you and your partner. Even if your income is higher, you may still qualify for Pension Credit should you have a disability, care for someone or if you have housing costs.

    Steven Cameron, pensions director at Aegon, says that while this exception benefits the poorest pensioners, there are many above the Pension Credit threshold who will struggle to meet the cost of the licence.

    He adds that three in 10 pensioner households who are entitled to Pension Credit do not claim it. “This may be because they’re not aware of their entitlement, don’t want to apply for income related benefits or just don’t think it’s worth the effort. This cohort of pensioners are losing out by not claiming what they are entitled to and for those unsure whether they are eligible for pension credit, the government’s online pension credit calculator is a good place to start.”

    Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, adds: “Pension Credit is also a gateway benefit to everything from help with bills to NHS costs – in addition to the free TV licence.”

    Eliane Smith protesting outside Broadcasting House in Belfast over the BBC's announcement that it will be means-testing the TV license from 2020.

    Eliane Smith protesting outside Broadcasting House in Belfast over the BBC’s announcement that it will be means-testing the TV license from 2020.

    Will the TV Licence be scrapped?

    Right now, it is undecided if the TV License will be scrapped, but it’s definitely up for review. In a new government broadcasting white paper, the government has committed to carrying out a full review of the licence funding model before the start of the next charter period in 2028.

    The white paper notes that when the funding model was last reviewed, back in 2015/16, the government had concluded that while there were “a number of drawbacks” to the licence fee model, it remained the most appropriate option.

    However, this may be changing. In the white paper, the government notes that an increasing number of households are choosing not to get a licence. This is because they don’t watch live TV or iPlayer. If this trend continues, then either the BBC will have to have its funding cut or the price of the licence will have to increase.

    The TV Licence, and how viable it is going to be, has long been a topic of debate. This debate has only grown stronger over the last couple of years, with the Culture Secretary Nadine Dorries being such an outspoken opponent of the licence.

    Only time will tell what this means for the TV Licence. Personal finance analyst Sarah Coles notes that “the days of the TV Licence could be numbered”.

    She adds: “The big change that hit millions of TV owners was that the government made the BBC responsible for funding free licences for the over 75s, and from August 2020 the BBC restricted the benefit to those who receive Pension Credit. There has been a huge amount of opposition to cutting off this lifeline for millions of people, but essentially once the government passed the enormous cost to the BBC, its fate was sealed.”

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