Half a million people stopped paying BBC licence fee in the past year – after it rose to £180

Last year more than 500,000 British households stopped paying the BBC’s license fee; The head of the BBC has admitted major ‘broadcasting errors’ have eroded public trust.

The decline in the number of people paying the £180 annual tax, which rose by £5.50 in April, was identified as the biggest funding risk in the BBC’s annual report published today.

According to figures released by the broadcaster, there are currently 23.3 million TV licenses in force across the UK; In the last 12 months this number has decreased by 540,000 and this decline is accelerating.

The annual decline is almost double that recorded a year ago, when nearly 300,000 licenses were lost. The report warned of an ‘expectation of a steeper decline’ in the coming years.

While 94 per cent of adults use BBC services monthly, less than 80 per cent of households pay a license fee.

With the BBC’s license fee income down by nearly £1.2bn since 2017, chairman Samir Shah admitted that major broadcast failures, including those at Glastonbury and the BAFTA Film Awards, ‘affect confidence in our journalism, confidence in the BBC as a public institution and perceptions of how effectively we have to be accountable’.

President Trump is suing the BBC for at least $10 billion in damages after Panorama edited a speech that showed him encouraging his supporters to attack the Capitol.

It comes weeks after Labour’s plan to extend the license fee to exclusively cover households watching streaming services such as Netflix, Amazon Prime, Disney+ and Apple TV was branded ‘outrageous’ by critics as the BBC’s current Royal Charter expires at the end of 2027.

New chief executive Matt Brittin said the broadcaster faced ‘a moment of real peril’. Suggesting reform is needed, he said the current license fee model ‘ties us to the past’.

He added: ‘Throughout its history the BBC has proven how quickly it can reinvent itself to serve the needs of audiences. ‘Now we collectively need to mobilize this sense of urgency.’

The sharp drop comes as Culture Minister Lisa Nandy signaled her support for extending the license fee to only cover people using streaming services.

The BBC’s revenue has fallen by nearly a quarter over the last decade. The license fee currently accounts for roughly two-thirds of the company’s £5.9bn annual revenue.

The annual report stated: ‘Licenses decreased by almost 540 thousand over the year, with 23.3 million in force at year end; This decline was largely driven by a decrease in households requiring a TV license due to not consuming licensable content.

‘The total number of households declaring that a license is not required increased by 62,000 in the 2025/26 period, reaching a total of 3.7 million households.’

The previous annual report showed there were 23.8 million licenses in force.

Along with a drop of more than half a million a year, the number is down more than 2.5 million since the beginning of the decade, when it stood at 25.9 million.

Speaking to the press after the report was published, the BBC’s chief financial officer, Berangere Michel, said: ‘There is some data behind this and we have made some predictions behind it and we can see that the vast majority of the decline is people not consuming licensable content.

‘This is a trend that I don’t see returning. I actually see this accelerating and that’s one of the reasons why we want funding to be reformed.’

The BBC’s financial outlook is ‘worsening’ in the second half of 2025, the annual report states.

It adds: ‘The steeper fall in license fee sales forecasts, combined with cost inflation and a challenging commercial trading environment, has further exacerbated the gap between revenue and costs.’

The annual report outlines the challenges facing the organization and states that the BBC cannot sustain its public service mission in the future unless its funding model is reformed.

Last month the BBC announced savings plans across its news, country and content divisions that would deliver £160 million of the £500 million in savings needed by 2028/29.

BBC chief executive Samir Shah said the report ‘detailed the significant pressures the BBC now faces, particularly the challenge of future funding’.

He added that the current funding model also means the BBC ‘cannot sustain its public service mission’.

‘The new charter should ensure that the BBC can continue to be a universal public service media organisation,’ he said.

‘We must remember that the BBC is, and always has been, much more than a simple broadcaster. This is a fundamental public interest.

‘It delivers unique benefits for audiences and the whole of the UK, for our society, our economy and our democracy.’

You don’t need a TV license to binge-watch shows like Stranger Things on services like Netflix, The Boys on Amazon Prime, or Slow Horses on Apple TV.

Houses only need to pay the license fee, which rises to £180 in April, if they stream live TV such as Champions League football or boxing via a streaming subscription.

Speaking to the Culture, Media and Sport Committee, Lisa Nandy said:’[The streamers] They will be reluctant to see additional fees from their consumers, but I think they will be more reluctant to see additional fees from their businesses.

‘We do not want to discourage investment in the UK. ‘Some of the biggest broadcasting companies are investing huge numbers across the country, partly because of British creativity, partly because of the BBC, but also because everyone is after locally based stories with universal appeal and the UK excels at that.’

At yesterday’s evidence session, Ms Nandy reiterated that no decision had been made on how the BBC would be funded in the future, but ruled out introducing a tax on flags, a tax on households and a flat tax on households.

‘We will regret it when the BBC is gone and so this charter is the most important of its kind because for too long we have ignored the question of how to put it on a sustainable basis,’ he added.

‘We’re trying to get to a situation where the BBC is sustainable, where it can not only survive but thrive, and those of us who use it will pay for it.’

Currently people don’t need a TV license to watch “on-demand” programs like Stranger Things on services like Netflix – but Labor could change that

Amazon Prime hits like The Boys will require £180-a-year licensing fees despite not being live TV

Enslaving Britons would be a ‘desperate’ move by Keir Starmer Government, critics say payThey collect a tax of £180 a year to fund the BBC. Watch on-demand TV only through competing broadcasters.

John O’Connell, chief executive of the TaxPayers’ Alliance, told the Daily Mail: ‘Forcing streaming service subscribers to pay the license fee would be an extreme extension of an already unpopular tax.’

Lisa Nandy backed extending the BBC license fee to include users of streaming services such as Netflix and Disney+

Extension of the license fee to subscribers of the following services: Netflix The preferred option for Labor isIndustry sources involved in talks regarding its future starting from December 2027 say the following:

‘It’s pretty desperate to claim that everyone should pay for the BBC whether they watch it or not,’ said a broadcast source with knowledge of the negotiations.

‘The BBC needs to think more radically and creatively about how to raise revenue in a way that does not undermine universal access.’

The government is said to be wary of funding the BBC with advertising or a new subscription model as it would hurt ITV and Channel 4.

Instead, a blanket approach could be implemented where the license fee is extended to cover all broadcast platforms when the current BBC contract ends in December 2027, according to a report in The Times.

There is an industry source He said ministers preferred this ‘broad approach’ to the license fee over an advertising model.

John O’Connell of the Taxpayers’ Union said: ‘In an age where viewing options are endless, taxpayers should not be forced to fund the BBC just because they own a screen or use a streaming service.

‘Ministers should finally look at a fairer, more modern funding model and abolish the license fee, rather than dragging more people into the license fee web.’

Culture minister Lisa Nandy has previously said she would be concerned a switch from license fee to BBC subscription would harm the Beeb’s ability to ‘unite the nation’.

He said: ‘If you believe, as I do, that one of the BBC’s greatest strengths is its ability to unite a nation that finds many ways to divide itself, then I think you need to be careful about the use of subscriptions and paywalls.’

The BBC declined to comment on The Times’ report, saying it was up to the Department for Culture, Media and Sport.