Back in 2000, the Labour government introduced free television licences for over 75s. Since then, the Conservatives announced in 2015 that the BBC would cover the cost as part of a fee settlement.
The cost of providing the free licences is £745m, around a fifth of the BBC’s budget. The BBC said that the cost would have resulted in “unprecedented closures” and that a number of national and local radio stations would have been at risk.
As a result of the cost, the BBC have said they have acted in “fairness” to scrap the free licences by June 2020.
How does this affect you?
Under the new rules, only low-income pension households will receive free TV licences. If one person in your household receives Pension Credit (a benefit paid on top of your State Pension), you will still be eligible to claim your free licence.
However, households who don’t claim Pension Credit will now have to pay – which is said to be around 3.7 million pensioners in the UK. The cost will be the standard price of a colour licence at £154.50 a year.
Not only could this have a financial impact, but it could also have a psychological effect amongst the elderly too. Caroline Abrahams, charity director of Age UK, says:
"Make no mistake, if this scheme goes ahead we are going to see sick and disabled people in their eighties and nineties who are completely dependent on their cherished TV for companionship and news forced to give it up."
Our key tips
If you’re coming up to retirement age, see if you’re eligible to receive Pension Credit on top of your State Pension. If you live in a low-income household, this could provide valuable support to your income.
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