In a move follows a consultation with more than 190,000 people of which 52 per cent said they were in favour of reforming or abolishing free TV licences.
The BBC claims the move will help the poorest pensioners, with those who receive Pension Credit and live alone still eligible for the free licence, potentially affecting 1.5 million people.
Why the change?
The BBC Board were given the power to make the decision as to extend the free provision or not by the government following the cut of funding for free licences from Westminster.
Free licences were introduced in 2000 to reduce pensioner poverty by the then-Labour government, but funding was cut by the Conservative government in 2015, with the BBC forced to choose whether to take on the bill.
The decision will see the BBC spend around £250 million by 2021/22 depending on how many people take advantage of the scheme.
The broadcasting company states the money will be diverted from programming and make further savings and increase its commercial profits.
Current scheme ‘ultimately untenable’
The BBC Chairman, Sir David Clementi, said, “Ultimately, the Board did not think it right to abolish all free TV licences.
"Copying the current scheme was ultimately untenable. It would have cost £745 million a year by 2021/22 - and risen to over one billion by the end of the next decade. £745 million a year is equivalent to around a fifth of the BBC’s spending on services.”
He added, “The scale of the current concession and its quickly rising cost would have meant profoundly damaging closures of major services that we know audiences - and older audiences in particular - love, use, and value every day.
“It protects the poorest over 75s, while protecting the services that they, and all audiences, love. It is the fairest and best outcome.”
A petition by the charity Age UK saw more than 130,000 people sign their name in opposition against the move to means-tested TV licences. The charity said the change will “harm millions of older people who rely on their TV”.
When will the changes come into effect?
The changes will come into effect on 1 June 2020, with people aged 75 or over fully covered by their existing licence fee until 31 May 2020.
After this point, those not eligible for the free licence will have to purchase a TV licence every year at the same price as everybody else - £154.50.