Since 2000, all UK households with people over 75 have been entitled to a free TV licence. Up until 2015 the scheme had been paid for by the state, but at that time the then David Cameron-led UK government decided to pass on this burden to the BBC and through an Act of Parliament, the Government gave the BBC the power to decide what would happen next.

In a statement explaining scheme why offering free TV licences for all of those over 75s will come to an end after June 2020, BBC Director General Tony Hall noted that after June 2020, the cost of continuing with free licences for all over 75s would be £745 million a year and rising, around a fifth of the BBC’s budget. Hall added that if the BBC were we to meet these costs, it would result in a swingeing set of cost reductions that would in practice mean the closures of BBC Two, BBC Four, the BBC News Channel, the BBC Scotland Channel and Radio 5live in addition to a number of local radio stations.

Yet Hall also stressed that to simply to abolish free licences for all older pensioners wouldn’t be fair on those who would find it hardest to pay. And so, the BBC has decided to implement a scheme whereby from June 2020, anyone aged 75 or over who receives a Pension Credit from the UK government will also be entitled to a free TV licence funded by the BBC.

“We want to make claiming the free licence simple and straightforward,” Hall said in the BBC statement. “This new scheme will cost the BBC around £250 million a year. This will mean we have to continue to find significant savings, but we are confident that we will be able to protect the funding for services the public tell us that they enjoy.”