Over-75s could soon lose their free tv license due to the BBC losing money.

The broadcasting giant has said the cost of continuing to grant this free service would "fundamentally change the BBC".

The Government-funded scheme, which provides free TV licences to older viewers, will come to an end in June 2020.

BBC chairman Sir David Clementi said the board, which will make the final call, "does not underestimate the significance of the decision, its implications for the BBC and its audiences",

Options could include the BBC copying the Government scheme and paying for it.

He continued: "That could cost around a fifth of our budget - the equivalent to what we spend today on all of BBC Two, BBC Three, BBC Four, the BBC News Channel, CBBC and CBeebies.

"That would mean over 75s would not have to pay, as at present, but we think it would fundamentally change the BBC because of the scale of service cuts we would need to make."

This would mean the BBC would not have to make significant cuts to BBC services, but would have an impact on those over 75s, particularly poorer pensioners.

The BBC says it could also reform the scheme in various ways including discounting the cost of a licence fee for older people, raising the age from 75 to 80, or introducing means-testing.

The broadcaster said that it was "not backing any particular option over another today", as it opened a three-month consultation.

BBC director-general Tony Hall said: "This is an important decision.

"We have set out a range of options - each has merits and consequences, with implications for the future of the BBC, and for everyone, including older people.

"We need to hear views to help the BBC make the best and fairest decision."

It is expected that free TV licences would cost £745 million a year by 2021/22.

Economic consultants have said the cost of providing a free BBC service to over-75s would exceed £1 billion a year in a decade's time.

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