BBC licence fee to rise again next year - what does this mean for you?

The government has announced that the BBC licence fee is due to rise. In April 2025, it will increase in line with inflation each year until 2027.

In April the license free will rise to £174.50, which is an increase of £5, an extra 42p each month. The annual fee faced backlash under the Conservative government, with it being frozen for two years at £159 before it was increased at a lower rate than the corporation expected. It will be the second year in a row the cost has increased after the last £10.50 rise brought the charge to £169.50 in April.

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Announcing the new license fee, 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."

She continued “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.”

Under the current law, you must have a TV licence to watch or record live TV on any channel in the UK. This includes Channel 4, ITV, and Channel 5. You also need a TV licence if you use BBC iPlayer.

You need a TV licence if you are watching live shows on streaming services this includes Amazon Prime, ITVX, All 4, Sky, Virgin Media, BT, and My5. Although, you do not need to have a TV licence if you are only watching on-demand on these services. This includes Netflix, Amazon Prime, ITVX, Disney Plus, Now, and YouTube.

To help households struggling with financial pressures, the Government set up the Simple Payment Plan (SPP), which it will be expanding. It says the expansion will allow an estimated additional 9,000 unlicensed households experiencing financial difficulty per month to split up the annual payment into more manageable fortnightly and monthly instalments.

A BBC spokesperson said: “We welcome confirmation that the licence fee will increase in line with inflation next year. 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.

They added: “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.”