BBC licence fee to rise to £174.50 from April in line with inflation

The BBC licence fee is set for a hike in line with inflation each year till 2027, Government officials have declared.

In April, the fee will be £174.50—an increase of £5 or an extra 42p per month.

This follows the previous increase of £10.50 which brought the cost to £169.50 last April. Long-standing scrutiny over the fee led to a two-year freeze at £159.

In her statement to Parliament, Culture Secretary Lisa Nandy said: "The BBC provides much-needed programming for households across the country, including children’s education, world-class entertainment and trusted news for all people in all parts of the UK. I want to see it thrive for decades to come.

"Through the Charter Review, we will have an honest national conversation about the broadcaster’s long-term future, ensuring the BBC has a sustainable public funding model that supports its vital work but is also fair and responsive to those who pay for it.

"In the short-term, we are providing the BBC with funding certainty while supporting thousands more households facing financial hardship to spread the cost of a TV licence."

The household payment, which funds much of the BBC’s operations, will rise annually in accordance with the consumer price index (CPI) inflation rate.

The Government is set to review the BBC’s Royal Charter, including a public consultation, to explore funding options that will support the broadcaster's future sustainability. In response to financial pressures faced by households, the Government has announced the expansion of the Simple Payment Plan (SPP), which will enable an estimated 9,000 additional unlicensed households per month in financial difficulty to break down their annual payment into more manageable fortnightly and monthly instalments.

Amidst increasing financial strain, the BBC last month unveiled plans for significant changes, such as discontinuing the long-standing interview programme Hardtalk and reducing over 100 news roles. A BBC spokesperson said: "We welcome confirmation that the licence fee will increase in line with inflation next year."

They added: "We want everyone to get value from the licence fee and we are committed to delivering trusted news, the best homegrown storytelling and those special moments that bring us together.

"We also look forward to the debate about the future and working with the Government to ensure sustainable, long-term public funding.

"As part of these discussions we will run our biggest ever public engagement exercise in 2025 so that audiences are at the heart of shaping our future."

Meanwhile, the Government has discontinued the BBC Funding Model Review and its associated expert panel, previously established under the Conservative leadership.

Dame Caroline Dinenage, Chairwoman of the Culture, Media and Sport Committee, has emphasised the importance of the Government considering a wide range of perspectives, particularly from the creative industries, to ensure the BBC's future success. She remarked: "The licence fee rise is unfortunate timing."

Dame Caroline also highlighted concerns about the impact on households, stating: "At a time when many households are already feeling the squeeze, any increase that hits the pockets of the viewers and listeners who rely on BBC programmes could undermine the aim of commanding the support of the people who pay for the corporation."

She concluded with an anticipation of further discussions: "We look forward to exploring the detail of the future funding plans when the Secretary of State appears in front of us before Christmas."

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