Are over-75s most in need of free TV licences? New stats reveal younger age groups are less well off

11 February 2019
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The BBC is set to close its consultation on the free TV licence for over 75s and decide whether or not to keep the perk, ditch it or something in between. 

Ahead of the consultation's close on Tuesday, the think tank the Institute for Fiscal Studies (IFS) has looked into average incomes of those receiving the perk and those who pay for the licence. Its findings suggest that maintaining the free licences may not be justifiable on purely cost grounds. 

Until now, the government has funded the free licences, which cost £750 million a year. However, from 2020 the cost of funding them will be transferred to the BBC, which must then decide how to absorb the cost or cut it back.

Should it keep it unchanged, the BBC has warned it may have to cut back on some of its services. However, the charity Age UK has warned 50,000 pensioners would be pushed below the poverty line if the BBC halts the free scheme. 

The IFS has looked at relative incomes for over 75s and households where all members were under 75 years of age.

The research note, from IFS director Paul Johnson and senior research economist Jonathan Cribb, also looked at relative poverty rates between these groups.

It found that while the real median net household income for over 75s is slightly lower than younger households, the gap between the two has shrunk from 20% in the year 2000, when the free TV licence was introduced, to just 8%. This is demonstrated in the graph below (Figure 1).

It also found that over 75s now have a higher average income than both working age families with children, and households where the oldest person is under the age of 34.

In the year 2000 these two groups had incomes 9% and 10% higher than over 75s. By the year 2016, this had reversed, where over 75s had higher incomes by 8% and 7% respectively.

Relative poverty

The IFS also looked at relative poverty rates. This is defined as a household with an income less than 60% of the average income.

By this measure it found that as of 2016 18% of households eligible for a free TV licence were in relative poverty. This has declined from 28% in the year 2000.

Meanwhile, 23% of households where no one was aged 75+ were in relative poverty. See the graph below.

The IFS says that overall the stats demonstrate that households that receive a free TV licence have lower average incomes, but “significantly” lower poverty rates compared to the rest of the population.

It says that incomes and relatively poverty rates among over 75s have reduced “substantially” since 2000, when the free TV licence was introduced.

The IFS says: “Looking at measures of household income in isolation, it is hard to believe that if one were starting from scratch one would prioritise spending such a sum on providing this benefit for the over 75s as a whole group.”

Comments

In reply to by anonymous_stub (not verified)

Remove the free tv for 0ver 75's will cost whichever party does so the next election at least. Sugest we treat all MPs' expenses as taxable income and disallow most expenses presently available to them. We are poorly governed, expensively governed and unrealistically over governed. Fewer but better representatives would be much better

In reply to by anonymous_stub (not verified)

I am in my 70's living alone on just my state pension, I will qualify for free TV License if it's still free in a couple of years, I pay it now so what makes it any harder to pay because I am a couple of years older, nothing. Sell off the BBC to the private sector and end the License Fee as the BBC are enjoying unrealistic salaries and waste so much of our license fee. Why do they need so many radio stations wasting a fortune, our local BBC station already spends most of it's air time advertising what act is on at each pub or club which is advertising free for those their presenter favours.

In reply to by anonymous_stub (not verified)

They may be earning less, but as a law abiding citizen I have been paying the TV licence (which increases annually) for over 50 years! They haven't. I've been paying taxes into the system for over 50 years. They haven't. I found it tough to pay the TV licence when I was young and not earning a great deal. It's all relative. Do they not understand. Now they want pensioners like me to to continue paying ever incerasing amounts each year to subsidise the younger generation. No one suggested this for my generation.

In reply to by anonymous_stub (not verified)

The BBC is like the monarchy... liked and disliked, expensive and antiquated, but a British indulgence. Unlikely both will survive the future.

In reply to by anonymous_stub (not verified)

we are providing funds to countries who are laughing at us.Use this money to fund the licence for over 75's.The gentleman who says half should be paid obviously can afford to pay the whole sum.We should be doing even more look at Russia for instance and the free holiday given by Spain.Surely after serving the UK for a lifetime one should expect a little return of a thank you

In reply to by anonymous_stub (not verified)

That's a load of rubbish - pensions are one of the lowest in this part of the world considering we're one of the richest countries. Pensions need to be higher as they're a pittance at the current level and way below average earnings. The reason it's so low is the Tories are plundering the National Insurance scheme for their own benefit and to so called pay off the National Debt when it is rising higher and higher with nothing to show for it. This is another excuse to put profit in private/MPs back pockets - nothing less!

In reply to by anonymous_stub (not verified)

Include the TV licence in our council tax (as they do in France) and those who can't afford it have to apply for exemption. Simple! But then we don't do simple do we?

In reply to by anonymous_stub (not verified)

Over 75's have paid their TV Licence for approx. 50/55 years so have done their bit towards helping the BBC, now they should consider other ways of raising funds like advertising and sponsorship so they can ditch the licence for all of us. That would save money on issuing the licence, searching for non payers and other incidentals that have been building up over the years.

In reply to by anonymous_stub (not verified)

IFS total twaddle got to be a tory clown in there somewhere.

In reply to by anonymous_stub (not verified)

I agree with comments made so far. The BBC grossly overpays staff at licence payers expense. I am surprised that the IFS has devoted so much energy (and perhaps, cost) to their study on the changing demographics of TV viewers and their relative incomes and age groups. There must be higher priority topics to investigate. As for young adults - we keep hearing that their financial challenges are so tough these days, meaning that more and more of them are still living with mum & dad, so they won’t need a tv licence - they can view at no cost, courtesy of mum & dad, who have already paid.

In reply to by anonymous_stub (not verified)

Well the younger generation when they have worked another 30 to 40 years and paid 16% on their mortgage interest not 0.5% for the last 10 years like the older people had to do then yes i agree with you.

In reply to by anonymous_stub (not verified)

I suggest pensioners get their state pension they have paid enough contributions to receive, those who have not paid enough only get the value they have contributed for, then cancel all benefits, kids should start work at 15 and start contributing like we did, child benefit was only meant to be a temporary thing to boost population after WWii so no longer needed. The young think they should be entitled to everything even if they can't afford it, go back to you get what you work for or do without, if you can't afford a home of your own rent a room or go into digs like we had to, be nice to see the snowflakes cope with that.

In reply to by anonymous_stub (not verified)

Most over 75s look towards these free licences.The BBC overpays presenters and most programs are rubbish or repeats.If you pay for sky and others then why should you have a licence anyway.Its outdated.The BBC has never moved forward and they should find other ways of funding.Some presenters are millionaires because of the licence fee and its wrong.

In reply to by anonymous_stub (not verified)

The question is not should the over-75's or under 30's have free television licences, but rather should anyone be paying for a television licence that funds just one channel and that not a very good one. The whole idea of the licence is now well past its sell buy date and it is time it was scrapped for all.

In reply to by anonymous_stub (not verified)

NO ONE SHOULD PAY A TV LICENCE UNLESS THEY STOP PAYING THE BOSSES AND SO CALLED CELEBRITIES STUPID OBSCENE AMOUNTS OF MONEY.

In reply to by anonymous_stub (not verified)

the bbc tv licence should be desolved leaving the private company to fund itself. I feel that the bbc is no longer impartial and leans heavily to the left, and, if the tommy robinson programme on 23/2/19 is shown to be correct, that the bbc have blackmailed individuals to prejudice another person, they are facing criminal prosecution. Due to the unique way the bbc is funded, they soon will be moribunded!

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