The government has confirmed that BBC licensing costs will rise from April

The Family Payment, which funds much of the BBC's operations, will increase each year in line with annual consumer price index (CPI) inflation.

The annual allowance came under scrutiny for years under the previous Conservative government, with it frozen at £159 for two years (later increased to £169.50).

In April the license fee will increase to £174.50. An increase of £5 or an additional 42p per month after the last increase of £10.50 brought the cost to £169.50 in April.

The BBC license fee will rise with inflation every year until 2027, rising to £174.50 in April, the government has announcedhttps://t.co/kNz0vwQYPb

— Nation.Cymru (@NationCymru) November 29, 2024

In a written statement to Parliament, Culture Secretary Lisa Nandy said: “The BBC provides much-needed programming for households across the country, including children's education, world-class entertainment and trusted news for all people in all parts of Britain. I want to see it flourish in the coming decades.

“Through the Charter Review we will have an honest national conversation about the long-term future of the broadcaster, ensuring the BBC has a sustainable public funding model that supports its vital work, but is also fair and responsive to those who make it pay.

“In the short term, we are providing funding security to the BBC and supporting thousands of households in financial difficulty to spread the cost of a TV license.”

The government will use a review of the BBC's Royal Charter, which will include a public consultation, to consider funding options to support the broadcaster's long-term future.

To help households facing financial pressure, the government has set up the Simple Payment Plan (SPP), which it will expand.

It says the expansion will allow an estimated 9,000 unlicensed households experiencing financial hardship each month to split the annual payment into more manageable fortnightly and monthly installments.

The BBC is under increasing financial pressure and last month unveiled a raft of planned changes, including the axing of in-depth interview show Hardtalk, as it looks to cut more than 100 news roles.

A BBC spokesperson said: “We welcome confirmation that the license fee will rise in line with inflation next year.

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“We want everyone to get value from the license fee and we strive to deliver trusted news, the best homegrown stories and those special moments that bring us together.

“We also look forward to discussing the future and working with the government to ensure sustainable public financing in the long term.

“As part of these discussions, we will host our largest ever public engagement exercise in 2025, putting the public at the heart of shaping our future.”