BBC warned that poorest pensioners would lose out under means-testing plan

The consultancy employed by the BBC to inform its thinking on the future of free TV licences for over-75s, Frontier Economics, warned the BBC in its report to the Corporation in November 2018 that under the means-tested option which they selected this week, only 11 per cent of the poorest tenth of households currently receiving the free licence would actually get to keep it. 

 On Monday 9 June 2019 the BBC announced that from June 2020, the free TV licence would only be available to older people aged 75+ if they were in receipt of Pension Credit, a means-tested benefit designed to help older people on very low incomes.

 The Frontier Economics report also told the BBC that:

• A means-test implemented today with the current age threshold would lead to average losses of 2.1 per cent of income among the poorest decile (ten per cent) of over-75s (measured by income)
• A body of evidence shows that increasing take up of Pension Credit is extremely challenging and is little affected by a range of different incentives
• Another  consistent  finding  is  that  older  households  appear  less  likely  to  claim (Pension Credit) than younger pensioner households. This appears  to  hold  even  controlling  for  the  fact  that  older  pensioners  also  tend  to have lower incomes.

The Charity Age UK says this shows beyond any doubt that the BBC’s plan to make free TV licences available to only those over-75s who get Pension Credit will cause hardship and injustice among the oldest people in our society who are living on low incomes. In a new briefing paper, Age UK explains in more detail why this is. The five reasons, the first four of which are recognised in the Frontier Economics report to the BBC are:

• The low take up of Pension Credit, to which the BBC intends getting a free TV licence to be linked from June 2020; two in five of all those eligible do not claim
• Unfairness to older people whose incomes are even 10 pence higher than the level that makes them eligible for Pension Credit, without which they will not be able to have a free TV licence – the ‘Cliff Edge problem’
• Some older people may be reluctant to share the fact that they are on a low income and therefore get Pension Credit with an ‘outside body’, the BBC, but unless they are prepared to do so they will not get the free licence - ‘the desire to preserve dignity and privacy’
• Some older people will struggle to ‘self-validate’ that they are in receipt of Pension Credit, however straightforward the process is, for example, because they are living with some loss of cognitive function or chronic illness
• And finally, a fifth reason which the Frontier Economics report did not comment on because it has only emerged in the last month – the Pension Credit rule change: the Government has made a policy change which means that pensioners in a so-called ‘mixed age couple’ now cannot claim Pension Credit until both partners are of pensionable age, reversing the longstanding position that the benefit system operates on the basis of the age of the older partner. This policy change will not impact on many over-75s but is a bitter blow for those affected; they were already set to be many thousands of pounds poorer a year and will now be worse off still.

Caroline Abrahams, Charity Director at Age UK said: “It is now crystal clear that under the BBC’s plan to means-test the free TV licence for over-75s many hundreds of thousands of the poorest older people will lose out – even the BBC’s own report says so. No one can now claim that the BBC’s plans will protect older people who cannot afford to pay because all the evidence shows they won’t. This means that hundreds of thousands, including many in their eighties and nineties, are set to face horrible choices about whether they should give up their TV, cut back on essentials such as eating and heating or, frankly, break the law by not getting a licence at all.

“I think the public agrees this situation is deeply unfair – our petition has more than 400,000 names on it today and rising. It is totally unnecessary too: the Government should never have given the responsibility for the free TV licence to the BBC without the money to fund it and the mess we have now is the inevitable result. The BBC cannot save the free TV licence for over-75s, it would cost them a fifth of their total budget, but our next Prime Minister certainly can: at less than 0.1 per cent of public spending the cost to the public purse is small change – but saving this entitlement would mean so much to so many older people. We call on all the candidates for the leadership of the Conservative Party to pledge their support.”

More than 420,000 people of all ages have signed Age UK’s petition to save free TV licences for the over 75s, following the BBC’s announcement that from June 2020 TV licences for over 75s will be means tested. Since Monday’s announcement, Age UK’s SwitchedOff petition has gained momentum, attracting 290,000 online signatures in 70 hours, which Age UK says shows growing support for the over 75s to keep their free TV licences.

Through Age UK’s SwitchedOff campaign, the Charity is calling on all leadership candidates of the Conservative Party to take back responsibility for the funding of free TV licences for the over 75s if they become Prime Minister.  The Charity is also urging older people, their friends, neighbours, families and grandchildren to support its petition on social media using #SwitchedOff.

* Read the Review of Over 75s Funding report here

* Age UK https://www.ageuk.org.uk/

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