The BBC license fee will rise every year in line with inflation until 2027, the government has announced.
This will mean bills will increase by £5, or an extra 42p per month, from April next year, bringing the total cost of a TV license to £174.50.
The hike comes after a £10.50 increase increased the amount to £169.50 in April this year.
The annual fee came under scrutiny for years under the previous government and was frozen at £159 for two years before being increased to a lower rate than the company had planned.
In a statement to Parliament on Friday, the Culture Secretary Lisa Nandy said she wanted to see the BBC “prosper for decades”.
She said that through a review of the corporation’s Royal Charter there would be “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 which is also fair and responsive to those who pay for it.”
Lisa Nandy told Parliament she wanted to see the BBC “prosper for decades”. Photo: PA
“In the short term, we are providing the BBC with funding certainty while helping thousands more households facing financial difficulties to spread the cost of a television license,” Ms Nandy said.
The household payment, which funds much of the BBC’s operations, will be increased each year based on the annual consumer price index (CPI) inflation rate.
To help households facing financial pressure, the government announced it would extend the Simple Payment Plan (SPP), which allows eligible people to split the cost of a license into more manageable fortnightly and monthly installments.
The expansion will allow around 9,000 additional households without permits and facing financial difficulties to pay through the SSP, the government said.
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An estimated 500,000 households could be using SSP by the end of 2027, according to BBC analysis.
The BBC is under increasing financial pressure and last month revealed a series of planned changes, including the axing of in-depth interview show Hardtalk, as it considered cutting more than 100 media roles.
Tim Davie, managing director of the company, told Sky News in March that a business model for the license fee would be a mistake that could leave the UK media market “looking exactly like America’s”.
A BBC spokesperson said on Friday: “We welcome confirmation that the license fee will increase in line with inflation next year. »
They said they also looked forward to the debate on the future and that, as part of these discussions, the company would “conduct our largest ever public engagement exercise in 2025 so that the public is at the heart of building our future.”