01273765959 mail@griffithsmithfm.co.uk

Implications from the over-75 TV licence row

4th July 2019

Implications from the over-75 TV licence row

The BBC’s decision to scrap universal free TV licences for the over-75s is part of the larger debate about our growing ageing population.

Free TV licences for the over-75s were introduced by Gordon Brown in his 2000 Budget. It was a classic rabbit-out-the-hat Budget measure, designed to please at a relatively modest initial cost.

Wind forward to 2015 and a government looking to ease spending cuts discovered a neat way to deal with the rising cost of free TV licences: it passed the problem onto the BBC. In exchange for government agreement on a financing deal that provided an index-linked licence fee and closed loopholes on catch-up TV, Auntie accepted the poisoned chalice of responsibility for the free licence scheme from 2020.

While the BBC’s recent announcement has been met with predictable political outcries, it always looked as if the broadcaster would be forced to drop the universality of the over 75 free licences. As the corporation has pointed out, maintaining the status quo would cost £745m – a fifth of its total budget.

A look at population numbers casts an interesting light on the problem. National Statistics data and projections show:

  • In 2000 the UK had 4.37m people aged 75 and over.
  • By 2020 the corresponding figure is projected to be 5.84m – an increase of 1.47m or about one third.
  • The overall population is projected to have grown by about a seventh over the same period – less than half the pace of the growth in over-75s.

Simply on the basis of the growth in the over-75 population and the increase in licence fee, the cost in 2020 would be double that of 2000. So the argument around free TV licences is a microcosm of the much larger issue of an ageing population and intergenerational fairness. It is also a reminder of the dangers of relying on the government to fund a comfortable retirement. Private pension provision is a must…if only to fund later life TV viewing.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.  

 

To discuss your position in more detail, please contact one of our team on 01273 765959 or email mail@griffithsmithfm.co.uk

Griffith Smith Financial Management Limited is an appointed representative of North Laine Financial Management Ltd which is authorised and regulated by the Financial Conduct Authority. Financial Services Register No: 704336 http://www.fca.org.uk/register.

Griffith Smith Financial Management Limited Registered Address: West Wing, 47 Old Steine, Brighton, BN1 1NW. Registered in England & Wales, No. 08943379.

Neither Griffith Smith Financial Management Limited nor its representatives can be held responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

The Financial Conduct Authority does not regulate National Savings or some forms of mortgage, tax planning, taxation and trust advice, offshore investments or school fees planning.

The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at www.financial-ombudsman.org.uk

The information contained within this site is subject to the UK regulatory regime and is therefore targeted primarily at consumers based in the UK.

Please read our Privacy Statement before completing any enquiry form or before sending an email to us.