Thousands of older people could be forced to cut back on heating or food, Age UK warns

Scrapping the free TV licence for over-75s could push 50,000 older people into relative poverty, according to research by the charity Age UK, which is urging the government to pick up the bill of providing BBC services to elderly people.

The broadcaster opened a consultation last year on whether to start charging older people the £150.50-a-year fee, but the charity said such a move could distress many older people, “potentially forcing them to cut back on other essentials such as heating and food in order to remain informed, entertained, stimulated and connected to the world beyond their doorstep”.

Age UK calculated that forcing over-75s to start paying for BBC services could hit disposable incomes and leave tens of thousands of households facing a choice between being able to watch television or being pushed into relative poverty, which is defined as households with less 60% of median household income.

“Contrary to the stereotype suggesting that everyone in later life is well-heeled, the reality is that most are living on quite modest incomes, particularly as you go higher up the age range,” said Caroline Abrahams, charity director at Age UK.

Free TV licences for the over-75s were introduced by the last Labour government in 2000 in an attempt to reduce pensioner poverty, under an arrangement that saw the government directly compensate the BBC for lost revenue from public funds.

However, under a deal struck by the Conservatives in 2015, the BBC agreed to pick up the bill, a move that saved the government money but left the broadcaster facing a substantial extra cost burden of about £750m a year.

Although the BBC has publicly insisted it was keeping an open mind pending the results of the consultation, the corporation made it clear it would have to make enormous cuts to its programming budget and possibly close channels if it continued to provide services free to over-75s.

Q&A Why is the BBC planning to charge over-75s the licence fee? Show Hide In June 2019 the BBC confirmed that it plans to make most over-75s pay the TV licence fee from 2020. The change will affect around three million households. The BBC says the annual cost of the free licences is £745m. They argue that maintaining the status quo would have taken up a fifth of its budget, equal to the total amount it spends on all of BBC Two, BBC Three, BBC Four, the BBC News channel, CBBC and CBeebies. The corporation has said it will continue to provide TV licences to over-75s who claim pension credit, a means-tested benefit designed to help older people. It estimates this proposal will cost it £250m a year, requiring some cuts but no channel closures.

The policy of free TV licences for the over-75s was introduced in 1999 by Labour chancellor, Gordon Brown, with the cost met by the government. However, in 2015 the Conservatives, guided by George Osborne, struck a deal under which the subsidy would be phased out by 2020, with the broadcaster having to shoulder the cost. The government later gave the BBC responsibility for deciding what to do about the benefit, meaning any unpopular decisions on charging over-75s had to be made by the BBC rather than ministers. Jim Waterson, Media editor Photograph: www.alamy.com

The corporation also commissioned research pointing out many older people are wealthier than in previous generations, although its consultation admits some may be put at higher risk of social isolation if they lose access to free television.

The former prime minister Gordon Brown, who introduced the benefit while chancellor, has strongly opposed any change and pointed out the 2017 Conservative manifesto included a pledge to maintain the free TV licence.

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Reintroducing the TV licence for over-75s could also result in people in their 80s and 90s being prosecuted for failure to pay the licence fee, with potential prison sentences for those unable to pay.

One proposal is to introduce a discount rate for over-75s or take income into account, but Age UK also warned against means-testing the benefit amid fears vulnerable pensioners could fail to apply for such a discount.

The average BBC One viewer is now in their 60s, while the ageing audience for many BBC services means an increasingly large proportion of consumers will receive the corporation’s services free unless a change is made.

The BBC is also facing the need to redirect funding to attract younger audiences, who are less likely to consume the broadcaster’s content, especially in the face of competition from deep-pocketed rivals such as Netflix and Amazon Prime.

A BBC spokesman said: “Free TV licences for people over 75 are expected to cost £745m a year by 2021-22, and government funding for the scheme ends in June 2020. This is a really important issue. We’re conscious that pensioner poverty is still an issue for some older people.

“We have set out a range of options in our consultation – each has merits and consequences, with implications for the future of the BBC and for everyone, including older people. We need to hear everyone’s views to help the BBC make the best and fairest decision.”