BBC TV licences fell by over half a million in a single year, the corporation’s annual report has revealed.
By the close of the 2025/2026 financial year, 23.3 million licences were active, a decrease of 540,000.
The drop is attributed to fewer households requiring a licence, as they no longer consume licensable content.
Households declaring no need for a licence simultaneously rose by 62,000, reaching 3.7 million.
This decline follows 23.8 million licences being in force the previous year. Overall, the number has fallen by more than 2.5 million since the decade began, when it stood at 25.9 million.
Speaking to the press after the release of the report, BBC chief financial officer Berangere Michel said: “We’ve got some data behind that, and we’ve done some estimates behind that, and we can see that the large majority of the reason for the decline is people… not consuming licensable content.
“That is a trend that I don’t see changing back. In fact, I see it accelerating, and that is one of the reasons why we would like a reform of the funding.”
The annual report says the BBC’s financial outlook “deteriorated” in the second half of 2025.
It adds: “A steeper in projection decline of licence fees sales combined with cost inflation and a challenging commercial trading environment has exacerbated the gap between income and costs.”
The BBC’s licence fee income has dropped by more than £1 million over the past decade.
Over the 2016/2017 financial year it sat at £5.21 million, but over the same period in 2025/2026 it sat at £3.87 million – with a loss of £1.34 million, or 26%.
The report also highlights ongoing pressures on licence fee income, rising production costs and a rapidly changing media market.
Director general Matt Brittin said: “This is a moment of real jeopardy, not just for the BBC but for public service broadcasting and the UK as a whole.
“I believe the case for the BBC has never been stronger: public service, economic impact, UK sovereignty and values.
“Our mission has never been more needed. So reinventing the BBC to fulfil that mission in a fast-changing world is our duty and our challenge. That’s the work that is now under way.”
The annual report outlines the challenges the organisation is facing and states the BBC will not be able to sustain its public service mission in the future, without reform of its funding model.
While 94% of adults use BBC services per month, fewer than 80% of households pay the licence fee.
Last month, the BBC announced plans for savings across the news, nations and content divisions, which is set to deliver £160 million of £500 million in savings needed by 2028/29.
BBC chairman Samir Shah said the report “sets out in detail the considerable pressures now faced by the BBC – not least the question of future funding”.
He added that the current funding model also meant the BBC “cannot maintain its public service mission”.
“The new charter must ensure that the BBC can continue to be a universal public service media organisation of scale,” he said.
“We have to remember that the BBC is, and always has been, so much more than simply a broadcaster. It is a fundamental public good.
“It delivers unique benefits to audiences and to the whole of the UK – for our society, our economy, and our democracy.”
