The BBC licence fee is set to rise above £180 next year, marking the sharpest increase in years and reigniting debate over the broadcaster’s long-term funding model.
Driven by September’s 3.8% inflation rate, the annual charge for a colour TV licence is expected to climb from £174.50 to just over £181 when the government confirms the new rate later this month.
The increase comes as millions of households grapple with rising food and energy costs, and as the BBC faces mounting scrutiny over its relevance and revenue base amid the shift to on-demand streaming.
In 2024-25, around 23.8 million households paid the fee — 300,000 fewer than the previous year. Although the levy generated £3.8 billion, the broadcaster’s real-terms income has fallen by roughly a third since Netflix’s 2012 debut, undercut by high inflation and audience fragmentation.
Under the existing 2022 agreement, licence fee rises remain linked to inflation until at least spring 2028. When the deal was struck, ministers predicted the charge would “cost less than £175” by its final year — a forecast now overtaken by inflationary pressures.
Culture Secretary Lisa Nandy has pledged to honour the current deal but is exploring a mixed-funding model for the BBC’s future. Options under consideration include limited subscription services and expanded advertising, while rejecting direct taxpayer funding to preserve editorial independence.
A spokesperson for the Department for Culture, Media and Sport said no final decision has been made on next year’s fee, confirming: “We will set this out in due course.”
