Benefits claims cost the BBC £185m in free TV licences for over-75s

Older people have been scrambling to claim pension credit, which gives them access to winter fuel payments and a free TV licence

Free TV licences are costing the BBC £185m after the number of people aged 75 and over claiming the concession tripled.

It comes after older people scrambled to apply for pension credit following the Government’s initial decision to means-test winter fuel payments. Pension credit gives claimants access to winter fuel and a free TV licence.

Despite ending universal free licences for older people, The i Paper’s analysis of figures shows the BBC is still bearing an increasing cost from over-75s claiming free TV licences.

The figure rose by 50,000, from 775,000 to 825,000, in 2024/25, reveal documents published alongside the BBC’s annual report.

Combined with an additional 269,000 free licences for people in retirement homes – a separate concession – the £169.50 licences cost the BBC more than £185m in 2024/25.

If more people claim, the figures could top £200m next year after the BBC increased the annual charge to £174.50 in April.

The additional expenditure for the corporation comes at a time when the BBC is cutting thousands of hours of programming to achieve a £700m annual savings target by 2028.

The previous year saw an increase of just 16,000 people claiming free licences for over-75s. Five years ago, shortly after the universal concession ended, the BBC paid for just 1,481 over-75s licences.

However, the cost is still lower than the £745m a year the BBC estimated it would have to pay if it maintained free licences for all elderly people.

Impact of winter fuel changes

Anyone over 75 who qualifies for pension credit can claim a free licence, now worth £174.50 a year. The concession is not paid automatically, though and must be applied for.

The BBC said the spike in over-75 licences was due to “increased take-up” among those eligible and “our improved application process”.

But the rise is also likely to be a side effect of the Government’s initial move last year to restrict winter fuel payments to households that claim pension credit.

The DWP said it awarded an extra 58,600 pension credit claims from July 2024 to May 2025 following the announcement. However, the Government later backtracked on the winter fuel payment changes and widened the eligibility to pensioners with an income of £35,000 or below.

There are an estimated 475,000 pensioners over the age of 75, whose income levels qualify them for pension credit but have yet to claim the concession – and with it a free TV licence. If they did so, it would create another £83m hole in the BBC’s funding.

Dennis Reed, director of Silver Voices, which campaigns on behalf of older people, said: “The BBC is being disingenuous in claiming that the increase in free TV licences is partly down to their ‘improved application process’.

“The increased numbers mirror almost exactly the increased number of pension credit awards made by the DWP in the wake of the decision last year to limit the winter fuel payment to those receiving that benefit.”

A TV Licensing spokesperson said it was now easier for customers to claim a free TV licence “because we can now confirm their Pension Credit status more quickly”. Customers no longer need to send in evidence.

BBC tracking licence fee evaders

The cost of collecting the licence fee and tracking down evaders soared by 15 per cent last year, it also emerged.

Collection costs were £165.6m in 2024/25 compared to £145.4m in 2023/24. The evasion rate for 2024/25 is estimated to be 12.52 per cent of those who require a licence, according to the BBC documents.

TV Licensing said the increase in collection costs was partly down to the “rising costs of postage set by Royal Mail”, adding that it spent just four per cent of licence fee revenue on collecting licence fee payments – the same proportion as it was last year.

The BBC added that the evasion rate was due to “a lack of understanding of the breadth and range of services provided by the BBC” among young people who are increasingly watching streaming platforms and YouTube. Some are not aware they need a licence to watch any live TV stream.

The i Paper has reported that the BBC is operating an unofficial “amnesty” on prosecuting people over-75 who fail to pay their licence.

Non-payers continue to receive letters threatening enforcement action, in some cases up to the age of 100, but no court action for any person over 75 has followed since free licences for all the elderly ended in 2020.

Reed said: “Millions could be saved if the BBC stopped sending constant threatening letters to over-75s who they have no intention of ever prosecuting.”

The BBC has said more than 3.6 million households where one person is over 75 have transitioned to paying for their licence since 2020. The corporation has not confirmed an “amnesty” for people over 75 who use a device for live TV but ignore letters urging them to pay the charge.

TV Licensing said: “We are tasked by Parliament to collect the licence fee and enforce the law. One way we do this is by communicating with unlicensed households in a variety of ways – via letters, digital communications, and visits – to inform them when they need a licence, and the possible consequences of evasion.”

It also suggested it did not know the ages of unlicensed households.
Some 300,000 households cancelled their licence fee last year, the annual report disclosed, with 23.8 million licences in effect at the end of the year, a decrease from 24.1 million in 2023-24.

The decline equated to a loss of approximately £50m in revenue for the BBC. The rate of people cancelling their licences has slowed from the 500,000 who ended their payments the previous year.

Despite the shrinking number of licence fee payers, the corporation’s income from the licence fee rose slightly in 2024/25 to £3.84bn, up from £3.66bn in 2023/24, driven by a 6.7 per cent inflationary increase to the fee.

With another licence fee increase this April to £174.50 and an estimated household growth for 2024/25 at 0.32 per cent, the BBC believes its income from the charge should increase again next year.

“The current collection method remains fair, effective, and good value for money,” the report stated. “As we approach the end of the Charter (in 2027), we will proactively research how we might reform the licence fee to secure the benefits of a well-resourced, universal BBC of scale for the long term.”