A television licence is needed in the UK to watch programming as it is being broadcast or streamed live. It is also needed to watch content on BBC iPlayer and live events on streaming services, such as Amazon Prime. As it stands, households need to pay over £150 a year to acquire a licence but this cost has varied over the years.
How much was the licence fee?
From its creation, the BBC chose to adopt a licence fee model in lieu of a common commercial advertising one.
In 1923, the first wireless licence was issued for 10 shillings which is the equivalent to 50p, with 200,000 being handed out that year. By 2028, the number of households paying the licence fee soared to 2.5 million.
After the Second World War, the first combined radio and television licence was issued in 1946 for £2.
In 1968, a supplementary licence was rolled out for households that purchased colour televisions.
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Radio-only licences were scrapped entirely by 1971, alongside the requirement to have a licence for car radios.
Thanks to the Broadcasting Act 1990, the BBC was made responsible for the administration of the licence fee.
Due to a settlement between the Government and the public broadcaster, the BBC was charged with finding £800million in savings by 2021/22.
Most recently in April 2021, the television licence fee was increased once again from £157.50.
What is the licence fee today?
Currently, the licence fee for a household comes to an annual cost of £159 which covers all devices and television sets.
Various discounts and concessions are available to those who are considered to be in vulnerable groups.
For example, people who are legally blind are able to claim a 50 percent discount on their licence fee.
Furthermore, older people who are 75 or over and claim Pension Credit can get a free television licence.
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At the beginning of this year, the Government confirmed that it would be freezing the licence fee for the next two years.
This was primarily done due to the ongoing cost of living crisis and to give the Government time to explore alternative funding options for the BBC.
Among the options reportedly being considered is a subscription service model which would replace the traditional compulsory model.
Nadine Dorries, the former Culture Secretary, outlined the thinking behind the licence fee freeze.
She explained: “The BBC is a great national institution with a unique place in our cultural heritage.
“It broadcasts British values and identities all over the world and reaches hundreds of millions of people every day.
“But at a time when families are facing a sharp increase in their living costs we simply could not justify asking hard-working households to pay even more for their TV licence.
“This is a fair settlement for the BBC and for licence fee payers. The BBC must support people at a time when their finances are strained, make savings and efficiencies, and use the billions in public funding it receives to deliver for viewers, listeners and users.”