The cost of continuing to provide free TV licences for over-75s would “fundamentally change the BBC”, the broadcaster said, as it launched a consultation on the issue.
The UK Government-funded scheme, which provides free TV licences to older viewers, comes to an end in June 2020.
BBC chairman Sir David Clementi said the board, which will make the final call, “does not underestimate the significance of the decision, its implications for the BBC and its audiences”.
Options could include the BBC copying the Government scheme and paying for it. But the corporation writes “that could cost around a fifth of our budget – the equivalent to what we spend today on all of BBC2, BBC3, BBC4, the BBC News Channel, CBBC and CBeebies”.
“That would mean over-75s would not have to pay, as at present, but we think it would fundamentally change the BBC because of the scale of service cuts we would need to make,” the BBC said.
Another option could be scrapping the free licence fee for over-75s.
“This would mean the BBC would not have to make significant cuts to BBC services, but would have an impact on those over-75s, particularly poorer pensioners, who currently do not pay,” it says.
The BBC says it could also reform the scheme in various ways, including discounting the cost of a licence fee for older people, raising the age from 75 to 80 or introducing means-testing. The broadcaster said it was “not backing any particular option over another today” as it opened a three-month consultation.
The board “hopes” to make a decision by the summer.
BBC director-general Tony Hall said: “This is an important decision.
“We have set out a range of options. Each has merits and consequences, with implications for the future of the BBC and for everyone, including older people.
“We need to hear views to help the BBC make the best and fairest decision.”
Age UK is opposing any form of charge, saying there “are still significant numbers of older people living on very low incomes who would genuinely struggle to pay the licence fee”.
Charity director Caroline Abrahams said: “There are two million people aged 75-plus, one in two of whom is disabled and one in four of whom view the television as their main form of companionship. For many others, including those who are chronically lonely … the TV is a precious window on the world.”