How much is the BBC licence fee and who needs one?
Guy Levy/BBC/PA WireThe licence fee raised £3.8bn for the BBC in the year ending March 2025, according to the corporation's latest annual report.
That was an increase of £183m on the previous 12-month period, and represented 65% of the the BBC's total income of £5.90bn.
However, the number of households paying for the licence fee fell by 359,000 to 22.8 million.
How much is the BBC TV licence fee and what does it pay for?
The TV licence fee is currently £174.50 a year, up from £169.50 in 2024. It costs £58.50 for black and white TV sets.
Money raised from the licence fee pays for BBC shows and services, including:
- eight TV channels
- multiple national and local radio stations,
- BBC iPlayer
- the BBC website
- podcasts
- apps including those covering news, sports, CBeebies and weather
The BBC's remaining income comes from commercial and other activities - such as programme sales, grants, royalties and rental income.
In exchange for licence fee money, the BBC is required to provide public service broadcasting.
According to its Royal Charter, this means its mission is "to act in the public interest" by providing "impartial, high-quality and distinctive" content, which will "inform, educate and entertain" everyone who pays the licence fee.
Who needs to pay for a TV licence?
By law, each household in the UK - with some exceptions - has to pay the licence fee if they:
- watch or record programmes as they're being shown live on any TV channel
- watch programmes live on streaming services
- download or watch programmes on BBC iPlayer
The rules apply to any device on which a programme is viewed, including a TV, desktop or laptop computer, mobile phone, tablet or set-top box.
In most cases, people with second homes need to pay for a separate TV licence.
Tenants are responsible for ensuring they have a TV licence unless their tenancy agreement says their landlord will provide it.
In 2020, the BBC became responsible for paying the licence fee for all over-75s. The cost was previously covered by the government.
Since then, it has only funded free licences for households where someone of that age also receives the means-tested pension credit. The BBC funded more than a million free licences in 2024-25.
Anyone who is registered blind can get a 50% discount.
Customers who struggling to pay can spread the cost across 12 months.
How many people are prosecuted for not paying the licence fee?
If you do not pay the licence fee, you can be taken to court, and fined up to £1,000 plus legal costs and/or compensation.
The most recent figures show there were 25,550 convictions for licence fee evasion in 2024.
You cannot be sent to prison for licence fee evasion, but you can be jailed for failing to pay the resulting fine.
In March 2025, the TV licensing body estimated that around 88% of households which need a TV licence had one.
It said officers visited more than 1.9 million addresses over the previous 12 months, and found more than 64,000 people watching live TV without a licence.
It said £166m had been spent collecting the licence fee during the period.
What do critics of the licence fee say?
The licence fee was introduced in 1946, when the BBC was the sole UK broadcaster.
However, it now competes not only with advertising-funded TV channels, but also online content such as YouTube and subscription streaming services such as Netflix, Disney+ and Now TV.
Some people ask why they should be forced to pay for the BBC if it is a service they do not use.
The licence fee is also a flat-rate payment, which means that the poorest households pay as much as the richest.
Questions have been raised about whether non-payment of the licence fee is a serious enough issue to merit criminal prosecution.
How could the licence fee change in the future?
The licence fee's existence is guaranteed until 31 December 2027.
The government will begin a review exploring how the BBC might be funded after that point later in 2025.
It follows an earlier review launched by the previous Conservative government in December 2023.
In a speech in May 2025, BBC director general Tim Davie said the system for funding the BBC should be reformed and modernised.
He said he was not asking for the "status quo" to continue, but would "keep an open mind" about the future of the licence fee or what could replace it.
A number of alternative funding models have been suggested:
- a tax on broadband connections
- a government grant funded out of general taxation
- part-funding through advertising
- a subscription model
In January 2025, Culture Secretary Lisa Nandy ruled out funding the BBC from general taxation, and said that she was thinking "quite radically and creatively" about alternatives.