Wednesday, 29 July 2020



From 1 August 2020 the BBC has decided to restrict free TV licences to people aged 75 or more who also get a means-tested benefit called Pension Credit. 

Before the change around 4.6 million people over the age of 75 got a free TV licence. From 1 August the number getting one could be as low as 500,000. Another 1 million and more could get a free TV licence but only if they take action now. 
  • 450,000 people over 75 who also get Pension Credit have registered with TV Licensing. They will continue to get a free TV licence. The green slice of the pie
  • 472,000 people aged over 75 are on pension credit but have not registered with TV Licensing. They will not get a free TV licence after 1 August if they do not register. The yellow slice of the pie. They need to register with TV Licensing online or call 0800 232 1382 - at the moment that line is pretty rubbish. 
  • Up to 650,000 over 75s could get Pension Credit but have not claimed it. If they successfully claim Pension Credit they can contact TV Licensing and their free licence will be restored and backdated. If they do not successfully claim Pension Credit they will have to pay for their TV licence. The amber slice of the pie
  • All free licences expire on 31 July 2020. Anyone who does not get Pension Credit will have to pay from 1 August 2020. There will be more than three million people over 75 who cannot get a free TV licence whatever they do. The red slice of the pie.

In August TV Licensing will write to everyone who gets a free TV licence except those who have already registered as on Pension Credit. No one need do anything until that letter is received. People who get the letter will have two months to (a) register that they get Pension Credit or (b) claim Pension Credit and let TVL know or (c) pick a payment plan to pay the £157.50.

Some people who must now pay will not have paid for a TV licence since the scheme began in 2000. They will be able to pay by credit or debit card on the phone or online and can pay weekly, fortnightly, or monthly if they choose. 

People without a bank account or credit card will have to pay in cash at a shop with a PayPoint - or get someone to do it for them. DWP says there are 375,000 over 75s who access the state pension or pension credit via the Post Office Card Account. They are less likely to have a bank account. 
    Some of those who have to pay will have a very low income. An income as low as £209 a week for a single person or £305 a week for a couple will be just above the normal pension credit limit. They will have to pay in full for the Licence. That will cost up to 1.4% of their income. 

    Some couples may have a lower income than that and still be excluded. Couples where one partner is below state pension age can no longer claim Pension Credit for the first time and they may have benefits as a couple as low as £137 a week. The TV licence will be more than a week's income. However, a mixed age couple who already gets pension credit will keep it and will still be eligible to a free TV licence. 

    Who can get Pension Credit

    Pension Credit can only be claimed by people over state pension age - from October that will be 66. If they live with someone else as a couple then to claim Pension Credit in future both must be over state pension age (there are exceptions - see Couples below). If they get Pension Credit the free TV licence is given if either of them is over age 75.

    If you are over 75 and your income is up to £208.65 a week then you can get Pension Credit. If you live as part of a couple then your income is counted jointly and the upper limit is £304.20 a week. Even if you qualify for just 1p a week pension credit you will still get the £157.50 free TV licence.

    If you get Carer's Allowance you can add £37.50 to these amounts and still qualify. You can count as a carer even if you do not get carer's allowance if you would be entitled to it. See 'Carers' below.

    If you are severely disabled add £66.95 to these amounts. 'Severely disabled' normally means means you get Attendance Allowance. See 'Severely disabled' below. If you are part of a couple the rules for adding these amounts are complex but you should still apply.

    If you have savings or investments of up to £10,000 they do not affect your entitlement to Pension Credit. If they are more than £10,000 then an amount is added to your income. That amount is £1 a week for every extra £500 of savings. So savings of £15,000 mean that £10 a week is added to your income. Of course, savings of £500 will not produce an income of £1 a week. You will be lucky if you get 10p a week. But that is how the rules work. Any income the savings actually produce is ignored. For a couple, savings are added together and the limits apply to their joint savings.

    There is no upper limit for savings that disqualifies you from getting Pension Credit. Some people with low incomes and tens of thousands of pounds in savings can still get Pension Credit. But if savings are very high then your entitlement to Pension Credit will be wiped out. 

    Just claim!
    If your head is hurting with all these complex rules (mine often does!) then just claim pension credit. You can do that easily by calling 0800 99 1234. The call will be free. Have all your details of income and state pension with you and if possible your NI number. They will process your claim if you do qualify and tell you if you do not. 

    The average amount of unclaimed Pension Credit for people over 75 is £1820 a year. So it is well worth claiming regardless of getting a free TV licence. Even if your entitlement is just 1p a week you will still get the free TV licence.

    Check your entitlement
    If you want to check entitlement yourself then you can use one of the online calculators. All are anonymous. 

    The best online calculator is from an organisation called Entitled To. It will also work out if you can get any reduction in your council tax and, if you are a tenant, your rent as well. It also suggests other places you might be able to get financial or other help. Homeowners can claim Pension Credit.

    Another online calculator is run by the charity Turn2Us. It also has an online search for grants and other cash help you may get. So it is worth using for that.

    The extra help will almost certainly include money off your council tax (or rates in Northern Ireland). If your income is below £173.75 a week (£265.20 for a couple) then your council tax should be reduced to zero. If your income is higher than that then your council tax will normally be substantially reduced.

    Fiddly Bits

    Extra information about some of the complex rules that surround Pension Credit and the free TV licence.

    Limit for pension credit 
    There is some confusion about income limits for Pension Credit. That is because it is in two parts - guarantee credit and savings credit. Guarantee credit will raise your income to £173.75 a week (£265.20 for a couple). But if your income is higher than £150.47 a week (£239.17 couple) then you are also given an extra bit of pension credit called 'savings credit'. Entitlement to that runs out as your income exceeds £208.67 a week (£304.25 for a couple) though you will not see those two figures in any official publication.

    The savings credit is not paid to people who reached state pension age from 6 April 2016. They are men born from 6 April 1951 and women born from 6 April 1953. At the moment they cannot get free TV licences as they are still under age 75. When they can claim from April 2026 and 2028 there will be discrimination between men and women and the scheme may have to change. See also 'Younger People' below.

    A new rule for couples began on 15 May 2019. From that date they can only get Pension Credit if they are BOTH over state pension age. Before that date they could claim Pension Credit if EITHER of them had reached state pension age. So a man of 75 with a partner aged 65 is not now entitled to claim Pension Credit.

    However, no-one will have their pension credit taken away. So if you are a mixed age couple (as the DWP calls them) and you already got Pension Credit or Housing Benefit before 15 May 2019 you will still qualify for them.

    The DWP does not care if a couple is married, civil partnered, or neither. If they live together as a couple then they count as a couple.

    You qualify for Carer's Allowance if you spend at least 35 hours a week caring for someone else who is severely disabled. That normally means they get 
    • Attendance Allowance, or
    • One of the two higher rates of Disabled Living Allowance (DLA) or, 
    • Either rate of Personal Independence Payment (PIP). 
    If you are over state pension age you may not have claimed Carer's Allowance as it will not be paid on top of your state pension. But it is important to claim it as it will entitle you to more Pension Credit. 

    Severely Disabled
    For people over 75, severely disabled normally means you get 
    • Attendance Allowance, or
    • Constant Attendance Allowance paid to ex-service personnel
    Mixed households
    The free TV licence is available to any household where at least one person aged 75 or more lives. So if the licence is in the name of a younger person it should be changed to the person over 75 on pension credit who lives with them. The household itself will not be means-tested. So younger people will benefit from the free licence in those circumstances.


    DWP statistics for November 2019 show that 922,028 people aged 75 or more get Pension Credit. 

    DWP take up figures for 2017/18 - published in February 2020 - show that between 520,000 and 650,000 over 75s who could claim Pension Credit do not do so. The central projection was 590,000. This analysis uses the highest number. Roughly four out of ten people who could claim pension credit do not do so. The average amount unclaimed by them is £35 a week or £1820 a year. 

    The BBC now estimates that there were 4.4 million people who got a free licence before the rule change. That is lower than the estimate of 4.6 million produced for it by Frontier Economics in 2018 when it was consulting on changes to the free licence. The DWP, which still paid part of the cost in 2019/20, said there were 4,665,000 free licences in 2018/19 and forecast 4,779,000 in 2019/20 - an increase of 114,000 in a year. The Office for National Statistics predicts that the number of people over the age of 75 will grow by 165,000 a year over the next 25 years. That argues for a growth in the number getting free TV licences by around 139,000 a year over that period. In this blog I use the 4.6m estimated by Frontier Economics as a compromise between the BBC's low figure and the DWP's high figure. The BBC offered no explanation for why its figure is now lower.

    Why the BBC changed the rules

    The free TV licence for people over 75 was introduced by Gordon Brown when he was Chancellor of the Exchequer. It was announced in the pre-Budget Report on 9 November 1999 and confirmed in the Budget on 21 March 2000. It began on 1 November 2000, a few months before the June 2001 election which Labour won comfortably. The cost - around £350 million a year then - was paid by the DWP and it has continued to pay the BBC for the cost of the free licences. So the free licences did not cost the BBC anything.

    People now aged 95 or over will have had a free licence for 20 years. Those aged 75 to 95 will never have paid for a licence once they reached 75.

    As part of the renewal of the BBC Charter in 2015 the Government insisted that the BBC bear the whole cost of the free licences from April 2020. Passing on the cost was phased in over three years from 2018/19. The BBC estimates the full cost at £745 million in 2021/22 rising to £1 billion a year by 2030 as the number of 75 year olds grows and the price of the TV licence increases with inflation. The cost is around 15% of its current £5 billion a year budget and is more than the total cost of all its radio stations and almost as much as all its TV stations apart from BBC One. The BBC says it cannot afford to pay that full cost without major cuts affecting programmes enjoyed by all licence fee payers. The cost of the means-tested free licence scheme is estimated by the BBC at £250 million a year. However, that assumes that all the 1.5m over 75s who get or could get pension credit will do so and will register for a free licence. That seems very unlikely as take-up of pension credit is highly resistant to change and the cost is much more likely to be between £100m and £150 million a year. 

    As part of the Charter deal the BBC was allowed to raise the licence fee by inflation from April 2017. It had been frozen since 2010 as part of the previous Charter deal when the BBC had refused to take over the cost of free TV licences. It rose in April 2017 by £1.50 to £147, by £3.50 in April 2018 to £150.50, then in April 2019 it went up by £4 to £154.50 and then in April 2020 by £3 to £157.50. There are almost 26 million licences so the inflation rise brought in around £40 million in 2017/18, £90 million in 2018/19, £100 million in 2019/20 and will bring in around £75m in 2020/21. That is nothing like enough to match the decline in the DWP payment of between £200m and £250m a year over the three years 2018/19 to 2020/21 nor to pay the estimated continuing cost of the free licences for over 75s on pension credit. And of course the increase with inflation also has to fund the BBC's other rising costs including pay and services. 

    People outside the UK
    The change in the rules applies throughout the UK. People living in the Channel Islands or the Isle of Man - which are not in the UK - also pay for a TV licence and get a free one if they are aged over 75. Their position is still being discussed.

    Free TV Licence
    Version 2.3
    29 July 2020

    Monday, 20 July 2020


    If you pay for goods or services by credit or debit card or by a prepaid card you have clear rights to get your money back if anything goes wrong. So it is always safer to pay by plastic and you should always do so if you can. With a credit card you have two separate rights.

    Legal right
    If you pay by credit card for an item which costs more than £100 and up to £30,000 then the credit card provider has a joint legal liability with the retailer for the goods or services you buy. If the product or service goes wrong you can claim the full cost back from the credit card provider. 

    For example, you pay for a holiday or flight and the firm goes bust. Or you buy clothes online and they do not arrive. Or you purchase an electronic device which stops working after a week. Or you pay for an online service which is a fraud. In all those cases you can use your legal right to get your money back from your credit card provider. 

    The legal right covers purchases made anywhere in the world – whether you are buying in person abroad, or you pay online or by phone. Note the price limit applies to each item not the total amount of the bill. So two items of £80 each bought at the same time are not covered but one item of £160 is.

    It is called your ‘section 75’ (or s.75) right because it comes from that section of the Consumer Credit Act 1974.

    Of course, it is usually best to go first to the retailer or supplier to get your money back. But if they refuse or have disappeared or gone bust then the credit card provider must refund the whole cost.

    Even if you just pay for part of the purchase on a credit card and the rest in some other way s.75 covers you for the whole purchase price if that falls within the limits. So if you buy a £750 sofa and pay a 10% deposit of £75 on a credit card and then you pay the balance in cash, you can claim a refund of the whole amount from your credit card provider if the sofa doesn’t arrive or is faulty.

    There is no time limit on making a s.75 claim but it is always best to make a claim as soon as possible. If the purchase was more than six years ago you may find it more difficult as that is the normal limit on legal claims.

    Section 75 rights apply to every credit card – Visa, MasterCard, or American Express (credit cards but not its charge cards).

    Contract right
    If you pay by debit card, credit card, or prepaid card you have a separate right to get your money back called chargeback. It is part of the contract between Visa, MasterCard, or American Express and the bank or firm that provides the card. Chargeback generally has no upper or lower limits, but MasterCard won’t consider claims for items that cost less than £10. Chargeback is most useful for plastic card purchases not covered by s.75. It does not apply to American Express charge cards but American Express credit cards are covered by it (and, of course, they are covered by s.75).

    Chargeback covers the same problems as s.75 – goods that are defective, do not arrive, are fraudulent, or where the firm goes bust.

    There are time limits for claiming which are quite complex. Normally you have to claim within 120 days – about four months – of realising something has gone wrong. But there is also an absolute time limit of 540 days which is about 18 months. So claim as soon as you know something has gone wrong.

    The chargeback procedure involves your bank going to the bank of the supplier and trying to recover money from them. The supplier’s bank will then ask the supplier to provide the money. If the supplier refuses then its bank has to refund you if you have a valid calim. Some guides and some banks suggest it depends on the firm you paid agreeing to refund their bank. That is not true. If can only refuse to pay if it believes that you do not have a valid claim. If you insist you do then it goes to a dispute procedure with Visa, MasterCard, or American Express. The card network's decision is final. If it upholds your claim then the suppliers bank has to pay. It is part of its contract with the netork and if it refuses then it will - or should - lose the ability to use Visa, MasterCard, or American Express. Although it is not a right under a legal provision, it is an absolute right guaranteed by Visa, MasterCard, or American Express and their contracts with the card providers. If your claim is valid the supplier's bank must pay up.

    Many banks and card providers misunderstand chargeback and frontline staff may well say that you cannot recover your money or they must wait for the provider to refund them. If the product has failed or not arrived they are wrong. But if you ultimately lose and the network says your claim is not valid you may have to give the money back.

    How to claim
    Write to your bank or card provider setting out the details of what has happened and say you are claiming a full refund under s.75 of the Consumer Credit Act or under the chargeback procedure. In your initial letter always say that if you do not get a satisfactory response within eight weeks you will take the claim to the Financial Ombudsman Service. That tends to concentrate the mind. If the claim is refused or not resolved within eight weeks then do take it to the FinancialOmbudsman Service. Normally a claim to the Ombudsman costs the financial firm £550. It is free to you. The Ombudsman upholds most of the claims that reach it. You must go to the Ombudsman within six months after receiving a final refusal from the card provider.

    Not covered
    Section 75 and chargeback apply when the item you purchased is faulty, goes wrong, doesn’t turn up, or was fraudulent. They do not apply if you change your mind. However, if you buy online or over the phone you have an absolute right to reject the item as long as you tell the supplier within 14 days.

    Version 2.0
    20 July 2020