The local impact of changes to free TV licences for over-75s

TV licences for people aged 75 and over have been free since November 2000. As of this year there are 4.6 million free TV licences in the UK, accounting for 17.6% of all TV licences.

On 10 June 2019 the BBC announced its decision, following a public consultation, to restrict eligibility for free TV licences to households in which someone receives Pension Credit. This will come into force from 1 June 2020.

The concession for over-75s was previously funded in full by the Department for Work and Pensions (DWP). The Government forecast that ceasing to fund the free TV licence would save it £725 million a year from 2020-21.

This Insight explores the relationship between Pension Credit and free TV licences, provides local data on those affected and looks at who is and isn’t claiming.

How many people claim Pension Credit?

As of November 2018, there were 944,000 single or couple claims for Pension Credit where the lead claimant was 75 and over. The BBC estimated at the time of the consultation that a Pension Credit ‘passport’ would result in around 900,000 over-75 households still receiving a free licence. The 3.75 million over-75 households who do not receive Pension Credit would no longer receive a free licence.

These figures are based on existing levels of Pension Credit take-up. The BBC also estimated that if all entitled pensioners in the 75-and-over age group claimed the benefit, then “over 1.5 million households could potentially be eligible for a concession.” Even if take-up were at this upper end of the scale, this would still mean around three million households (two-thirds of existing beneficiaries) would lose their free TV licences.

How many will be affected in my local area?

Official figures on TV licence holders, including beneficiaries of the free over-75s TV licence, are only published nationally. There are no official breakdowns for regions, constituencies or local authority areas.

We can however derive a reasonable proxy measure of over-75 TV licence holders from the DWP’s annual statistics on households receiving Winter Fuel Payment (WFP). These set out the number of WFP-recipient households in each constituency and local authority which contain someone aged 75 or over. Given the (presently) universal coverage of WFP and free TV licences in this age group, the WFP caseload can be assumed to closely approximate the number of free TV licence beneficiaries.

We can use WFP statistics alongside DWP data on the number of Pension Credit claimants to estimate how many people will be affected when free TV licence provision is linked to receipts of Pension Credit.

Using the constituency data tool below you can access the estimates we produced in 2018, when the BBC launched its consultation on free TV licences. They are based on:

  • WFP households in the winter of 2017-18 containing someone aged 75 or over, and
  • Pension Credit claims in May 2018 where the lead claimant is aged 75 or over.

Subtracting the latter from the former, we can obtain an indication of the number of households who may lose their free TV licences, based on 2018 data.

Use the dropdown menu below to select the constituency you’re interested in and view key statistics.

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Although WFP is the best available proxy indicator, it is still an imperfect match to the population currently benefiting from free TV licences. One important difference in coverage between WFP and free TV licences is that pensioners in residential care homes do not qualify for WFP if they receive Pension Credit. Residents of care homes can however get free TV licences.

These figures are only available for Great Britain. Corresponding data on WFP and Pension Credit by age group for constituencies and local authorities in Northern Ireland are not published.

Who is and isn’t claiming Pension Credit?

The number of free TV licence beneficiaries from 2020 will depend heavily on Pension Credit claims. Estimates published annually by the DWP show that large numbers of low-income pensioners who are entitled to receive Pension Credit do not claim it.

In 2016/17 (the latest available year), the estimated take-up rate among those entitled to claim in the 75-and-over age group in Great Britain was around 59%.

This equates to a non-take-up rate of around 41%, or around 650,000 people who could be claiming.

The total amount of Pension Credit left unclaimed by people aged 75 and over is estimated to be in the region of £1.64 billion, or 38% of potential entitlements in that year.

If this level of non-take up persists into 2020 and beyond, then around 650,000 households could miss out on free TV licences that they are entitled to.

Alternatively, making Pension Credit a ‘passport’ to a free TV licence could increase the incentive to claim the benefit and boost take-up – which in turn would mean the Government spends more on Pension Credit (as well as less licence revenue for the BBC).

Could higher Pension Credit take-up cost Government the money it hopes to save on TV licences?

Based on the DWP’s take-up estimates, we can roughly estimate that if take-up among over-75s had been 16 percentage points higher in 2016/17 (75% rather than 59%), then this would have cost an extra £640 million in Pension Credit expenditure. This is more than it cost the DWP to finance the free TV licence concession in that year (£628 million).

Although a large rise in take-up of this kind seems unlikely – at least in the short term – any increase would eat into the £725 million saving that the Government expects to make from 2020 onwards. The BBC Board has said it will work, “with organisations representing older age groups and charities to help raise the visibility of Pension Credit as a way of claiming a free TV licence.” As part of this, TV Licensing, “will provide details of how [potential claimants] can apply via the DWP or the Department for Communities in Northern Ireland.”

Take-up estimates are only available for Great Britain as a whole, not for smaller geographies such as regions, constituencies or local authorities. Applying the national take-up rate to local level claimant data could provide a rough guide to the potential number of entitled non-claimants in a given area. However, it takes no account of potential variation in take-up across the country. There may be good reasons for take-up to be higher in some areas than in others (for example, greater awareness of the benefit in certain communities).

Further reading

Sources for constituency data tool