On Saturday (1 August) the BBC introduced a new concessionary TV licence scheme for people aged 75 and over, if they receive Pension Credit.
Under the previous scheme, which ran from November 2000 to July 2020, all households with someone aged 75 and over were eligible for a free TV licence. As of March 2019, there were 4.6 million free TV licences in the UK, accounting for 17.6% of all TV licences.
The previous concession for over-75s was funded by the Department for Work and Pensions (DWP). The Government forecast that its decision to phase out its funding of free TV licences (announced in 2015) would save it £725 million a year from 2020-21.
The BBC’s decision to link eligibility for free licences to Pension Credit was announced on 10 June 2019, following a public consultation. The change was initially meant to come into force on 1 June 2020, but due to the coronavirus outbreak, the BBC delayed it until 1 August 2020.
This Insight explores the relationship between Pension Credit and free TV licences. In the absence of local data, we have created the interactive dashboard below, using benefit claimant data to estimate the number of households affected.
How many over 75s claim Pension Credit?
As of November 2019, there were 922,000 single or couple claims for Pension Credit in Great Britain, where the lead claimant was 75 or over.
The BBC estimated that around 900,000 households with someone over 75 would still receive a free licence. It predicted that 3.75 million households with over 75s who do not receive Pension Credit, would no longer receive a free licence.
These figures are based on current 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 by TV licence changes in my area?
Official figures on TV licence holders, including those with the free over-75s 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). WFP is available for all state pensioners in the UK.
These statistics set out the number of households receiving WFP in each constituency and local authority, which contain someone aged 75 or over. Given the universal coverage of WFP, its caseload can be assumed to closely approximate the number of free TV licence beneficiaries under the previous scheme.
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 recipients of Pension Credit.
Using the constituency data tool below you can access our updated estimates, produced in July 2020. They are based on:
- WFP households in the winter of 2018-19 containing someone aged 75 or over, and
- Pension Credit claims in November 2019 where the lead claimant is aged 75 or over.
Subtracting the latter from the former, we get an indication of the number of households which may lose their free TV licences, based on 2019 data.
Use the dropdown menu below to select the area you’re interested in and view key statistics on people and households in the over 75 age group.
Use the dropdown menu below to select the constituency you’re interested in and view key statistics.
The data we have used
Although WFP is the best available proxy indicator, it is still an imperfect match to the population 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?
DWP annual estimates show that large numbers of low-income pensioners entitled to receive Pension Credit, do not claim it. In recent years there has also been a decline in the total number of claims.
In 2017/18 (the latest available data), the estimated take-up rate among those entitled to claim in the 75-and-over age group in Great Britain was around 61%.
This means that around 39%, or around 590,000 people who could have claimed, didn’t.
Estimates of the proportion of people entitled to claim are only available for Great Britain as a whole, not for regions, constituencies or local authorities.
Applying the national take-up rate to local level claimant data (as in our dashboard), could provide a rough guide to the potential number of people who could be claiming but aren’t in a given area. However, this approach takes no account of potential variation in claims 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).
Could the free TV licence scheme encourage more pension credit claims?
Making Pension Credit a passport to a free TV licence could increase the incentive to claim the benefit and boost take-up. The Government would then spend more on Pension Credit and there would also be less licence revenue for the BBC.
This would eat into the £725 million saving the Government expects to make from 2020 onwards. The Minister for Media and Data, John Whittingdale MP told the Commons on 21 July that the Government would “welcome” an increase in the take-up of Pension Credit.
Since the BBC announced its decision in mid-2019 to link free TV licences to Pension Credit, there has been no evidence to date of more Pension Credit claims. In fact Pension Credit claims among 75sandover declined from 928,000 in May 2019 to 922,000 in November 2019, continuing the gradual downward trend in claims.
The BBC Board said it would work with organisations and charities representing older age groups to “help raise the visibility of Pension Credit as a way of claiming a free TV licence.” In addition, TV Licensing will write to all over-75 licence holders from August to inform them of their options. The Media and Data Minister remarked that these measures, “will perhaps be the best marketing tool for Pension Credit that we have ever seen.”
This Insight was originally published as The local impact of changes to free TV licences for over-75s, in July 2019. It has been updated here to take into account new data released in May 2020 and the implementation of the scheme by the BBC.
Free TV licences for the over-75s, House of Commons Library.
Review of over-75s funding, Frontier Economics, page 55.
Sources for the constituency data tool
- DWP Stat-xplore
- DWP Winter Fuel Payment: recipient and household figures 2018 to 2019
- ONS population estimates
- National Records of Scotland UK Parliamentary Constituency Population Estimates (2011 Data Zone based)
- House of Commons Library calculations.
About the author: Rod McInnes is a researcher at the House of Commons Library specialising in social and general statistics.