NEWS
11/02/2019 12:35 GMT

Over-75s Now Earn More Than Younger People – But Still Get A Free TV Licence

Economists found that those eligible for free TV licences are seeing faster income growth than working age families and households under-35.

For all the stick millennials get, with their opulent avocado toast habits, it turns out pensioners who receive a free TV licence earn more than younger age groups who have to pay for it.

Over 75s have been entitled to free, government-funded TV licenses since 2000 on the basis that, back then, they faced higher rates of poverty and lower incomes than younger people.

But in the 20 years since then, over-75s now enjoy faster income growth and earn more on average than working-age families and households under the age of 35.

Analysis by the Institute for Fiscal Studies found that in 2000, median incomes for working-age families and households under 35 were respectively 9% and 10% higher than the over 75s.

By 2016, average incomes among these groups were respectively 8% and 7% below the average income for the over 75s.

Additionally, around three quarters of over-75-year-olds own their own home, and according to economists, “almost always outright – having paid off their mortgage”, leaving them with much lower housing costs than most working-age adults.

IFS
Real median net household income, after housing costs are deducted, for households with and without someone aged 75, 2000 to 2016

The IFS analysis lands just before the BBC consultation on TV licences is due to end on Tuesday.

Currently, nearly 5 million households get a free TV licence, and from June 2020, the government will no longer fund the £150.50 fee for over-75s.

So the BBC could have to dig into its own purse to fund the £750 million worth of licences, and now has to decide whether to take on this cost, and if so, who will get it.

Paul Johnson, director at the IFS, said: “When free TV licences for the over 75s were introduced in 2000 incomes of the over 75s were much lower, and poverty rates higher, than for younger groups.

“Today the over 75s have average incomes above those of working age families with children, and poverty rates well below those of under 75s.

“It’s hard to believe this would be the group prioritised for spending £750 million on free TV licences if we were making the decision from scratch today”.

According to TV licensing, the UK is buying more licenses than ever. The fee goes towards funding BBC TV and radio shows, allowing them to remain ad-free.