There will be a £10.50 increase on the BBC TV licence fee next year, bringing the new annual total £169.50 a year, Culture Secretary Lucy Frazer has announced.

It comes after the household payment, which funds much of the corporation’s operations, had been frozen at £159 and was set to rise in line with inflation next year.

However, the government has said the expected 9% increase, which would have meant an increase of around £15 from April 2024 has been reduced.

Speaking in the Commons on Thursday (December 7), Frazer told MPs the increase will instead be based on September’s consumer prices index (CPI) rate of inflation which was 6.7%.

This will mean an increase of £10.50 to £169.50 per year.

Why is the BBC TV licence being increased next year?

Frazier explained: “Under the terms of the settlement, the licence fee must now increase annually in line with CPI (consumer prices index rate of inflation), with the first increase due in April 2024.

“The Government is committed to supporting families as much as possible during these difficult times.

“We recognise bill rises are never welcome and family budgets remain under pressure.

“Today I am announcing that we will use the annual rate of CPI in September to calculate the increase of the BBC licence fee in April 2024.”

TV Licence explained

She stressed that the licence fee rise was being “kept as low as possible”.

Frazer added: “In April the licence fee will rise by 6.7% to £169.50 annually.

“This will minimise the rise for households, keeping it to £10.50 over the year, or 88p a month, rather than the rise of £14.50 which would have happened under the previous CPI measure.”

The news comes after the veteran TV executive Dr Samir Shah was named on Wednesday (December 6) as the Government’s preferred candidate to become BBC chairman.