The annual TV licence fee will rise by £5.50 to £180 from April 1, dealing another blow to household budgets already stretched by the cost-of-living crisis.
The increase, confirmed by the Department for Culture, Media and Sport (DCMS), represents a 3.12 per cent rise on the current £174.50 charge and is intended to help keep the BBC on a “stable financial footing”.
But the move has triggered a furious backlash from viewers and politicians alike, with critics questioning why families should pay more for the BBC at a time when trust in the corporation is under pressure and streaming services offer cheaper alternatives.
How the rise was calculated
The new fee has been set in line with inflation, based on the average Consumer Prices Index (CPI) rate between October 2024 and September 2025, which stood at 3.14 per cent. Linking the licence fee to inflation was agreed under a 2022 settlement between the BBC and the then Conservative government, which runs until at least 2027.
Under that deal, the licence fee was frozen at £159 for two years, before returning to inflation-linked rises. However, higher-than-expected inflation has pushed the fee above earlier projections.
Cheaper than streaming — but closing the gap
The £180 licence fee now exceeds the annual cost of several popular streaming subscriptions.
Netflix costs between £5.99 and £12.99 a month in the UK, or £71.88 to £155.88 a year. Amazon Prime Video is £8.99 a month or £95 a year, while Disney+ ranges from £71.88 to £149.90 annually, depending on the plan.
The cheapest combined annual cost of Netflix, Prime Video and Disney+ is £238.76 — just £58.76 more than the TV licence, highlighting how the gap between the BBC and its commercial rivals is narrowing.
Falling licence sales and mounting losses
The rise comes at a sensitive moment for the BBC. The corporation has reportedly lost more than £1 billion in a single year, as a record one in eight households refused to pay the licence fee.
Licence sales fell from 24.1 million to 23.8 million in 2024/25, denting BBC income in real terms. Around £550 million is estimated to be lost each year through evasion.
Despite this, the BBC still raised £3.8 billion from the licence fee in 2024/25.
Government response
Downing Street insisted the Government remains committed to easing cost-of-living pressures, despite approving the increase.
The Prime Minister’s official spokesman said the BBC is independent from government, but stressed that tackling the cost of living remains a priority, pointing to policies on rail fares, healthcare access and welfare reforms.
The DCMS said the increase was required under the existing licence fee settlement and would help ensure the BBC can continue to deliver public service broadcasting and support the wider creative industries. The fee is also set to rise again in line with inflation in April 2027.
Who pays — and who doesn’t
Any household that watches or records live TV on any channel, or uses BBC iPlayer, must pay the licence fee. Failure to do so can result in a fine of up to £1,000.
Free licences remain available for over-75s on pension credit, with reduced fees for blind people and some care home residents. The cost of a black-and-white TV licence will also rise, increasing by £2 to £60.50 in 2026/27.
What happens next
The future of the licence fee remains under review as part of the Government’s Charter Review consultation, which is examining alternative funding models for the BBC beyond 2027.
With traditional TV viewing in steady decline and more households turning to streaming services, critics warn that further rises risk accelerating the exodus from the licence fee altogether — a trend that could reshape the future of the BBC itself. Photo by Anniyaparveen, Wikimedia commons.