The BBC TV licence fee will increase by £5 or 2.9 per cent from £169.50 to £174.50 next April, the Government revealed today.

The second consecutive annual rise follows a 6.6 per cent or £10.50 increase from £159 which came in this April, based on the inflation figure for September 2023.

Viewers reacted with fury, with one saying: ‘So TV licence is going up again. I won’t be paying’. Another added: ‘I don’t watch BBC , why should I pay the tax?’

The fee faced years of scrutiny under the Conservative government, and it was frozen for two years before rising in April at a lower rate than the BBC expected.

Last year Ministers launched a review into the licence fee model to look at alternative funding for when the broadcaster’s current charter period ends in December 2027.

The Government said the latest licence fee rise was based on the rolling Consumer Prices Index (CPI) inflation figure from October to September 2024 of 2.96 per cent.

By convention, the licence fee is rounded to the nearest 50p. The annual cost of a black and white TV licence will rise to £58.50, up 2.6 per cent from the current £57.

In order to give the BBC financial certainty up to 2027, the Government said it was committed to keeping the licence its current form and would lift the fee in line with inflation. The review will help to decide its future funding beyond that date.

Culture Secretary Lisa Nandy said today: ‘The BBC provides much-needed programming for households across the country, including children’s education, world-class entertainment and trusted news for all people in all parts of the UK. I want to see it thrive for decades to come.

The licence fee was introduced in June 1946, when television broadcasts resumed following the Second World War.

If you watch or record broadcasted TV programmes, you must have a TV licence either through purchase or given free to those receiving pension credit and 75 years or older.

All forms of transmission include using the BBC iPlayer on a smart television, laptops and tablets.

The annual fee, reported to be worth more than £3billion to the BBC, currently costs £169.50 – but this will rise to £174.50 next April.

The cost pays for TV, radio and online programmes and services including iPlayer, Radio 1, CBeebies and the World Service.

It also funds Welsh language TV channel S4C and local TV channels.

‘Through the Charter Review, we will have an honest national conversation about the broadcaster’s long-term future, ensuring the BBC has a sustainable public funding model that supports its vital work but is also fair and responsive to those who pay for it.

‘In the short term, we are providing the BBC with funding certainty, while supporting thousands more households facing financial hardship to spread the cost of a TV licence.’

The Department for Culture, Media and Sport (DCMS) added that the BBC ‘now faces increased global competition from streaming giants, changing viewing habits and a decline in licence fee income of more than 30 per cent’.

The Government also said it was expanding the Simple Payment Plan (SPP), allowing an estimated 9,000 extra unlicensed households experiencing financial difficulties to split up the annual payment into fortnightly and monthly instalments.

The aim is to reduce their risk of enforcement action, with BBC’s analysis suggesting that the expansion could double the number of households using the SPP to around 500,000 by the end of 2027.

The DCMS also pointed out that Foreign Secretary David Lammy had announced an extra £32.6million for the BBC World Service in 2025-26.

It said this was a ‘clear demonstration of the value the government places on the World Service’s role in providing impartial accurate news to a global audience of 320million’.

Earlier this month, new BBC chairman Samir Shah said the corporation should not have to justify ‘our very existence’ every ten years and the Government should have the confidence to say ‘the BBC is a really good thing’.

Mr Shah questioned why the BBC’s charter needs to be regularly reviewed – unlike other bodies set up under Royal Charter, like the Bank of England and British Council – as he gave his first public speech in his new role on November 5.

And he said: ‘Whatever the future funding model turns out to be – anything from reforming the licence fee, replacing it, or coming up with a whole new mechanism – the independence of decisions on the level of the fee itself, and how that money is spent, will remain a key issue.’

Alternatives to the licence fee could include a broadband levy, advertising or a subscription model.

A subscription model, as used by streaming services such as Netflix and Disney+, has long been touted as an alternative to the licence fee.

Currently, the BBC does not have advert breaks on its domestic TV channels and its website is free from advertising.

But there have been concerns raised in the past that a switch to adverts could encourage the broadcaster to focus on programmes that bring in viewers and lead to revenue at the expense of programmes that serve smaller groups.

As an alternative to the licence fee, the Government could support the BBC financially through an annual grant – but questions have been raised over how this would affect the broadcaster’s editorial independence.