Over 75s may have to pay the licence fee in future, as study reveals prohibitive cost of funding the concession.
Currently people aged over 75 enjoy fee-free viewing and use of BBC television and online services such as iPlayer, saving £150.50 each year for a colour TV licence.
However, in 2015 the government decided to shift the financial burden of this concession from Treasury coffers to the BBC. This change is set to take effect in 2020.
Now, a report by Frontier Economics, commissioned by the BBC, has shown that the cost to the broadcaster (in lost revenue the licence fee would otherwise attract from over 75s) would be £745 million per year, rising to £1 billion by 2029/30 due to the UK’s ageing population.
The report notes that older generations have “seen a marked improvement in their absolute and relative living standards” since 1999/2000 when the licence fee concession for over 75s was introduced.
The report adds: “Incomes, wealth and life expectancy of older people have improved significantly, pensioner poverty rates have fallen, and older households report higher well-being on a range of metrics.”
The BBC commissioned the research in order to consider the cost and benefit of maintaining the concession.
That the study confirms the wealth of retirees has improved in the 18 years since the concession’s introduction gives credence to the potential threat of scrapping it altogether.
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A BBC spokesperson says: "This is an important discussion paper which we are studying carefully. Their full report - which looks at a range of approaches the BBC could take - will be published shortly.
"As we have said, the government concession ends in June 2020. We are going to be consulting on what then happens. It might be a concession on the same terms, it might be different concession.”
As of yet it is undecided what will happen to the concession. Frontier Economics will publish its proposals at a later date. Options that could be considered include maintaining the concession, means-testing, or scrapping altogether.
The report says: “These changes give cause for reflection on what an appropriate approach to providing concessionary licences to older households might look like.
“We will shortly publish a detailed report which will explore the impact of continuing the current over-75s concession and a range of possible options for reform.”
The BBC’s spokesperson adds: "There are important issues to consider. We will do nothing without consulting with the public. Everyone who wants to contribute will be able to do so."