Fewer people are paying the ‘unenforceable’ BBC licence fee. Here’s what could replace it

The future of the BBC's TV licence fee is under scrutiny after the number of licences fell by more than half a million in a single year. The corporation’s annual report, released on Tuesday, showed there were 23.3 million licences active by the end of the 2025/2026 financial year, meaning a drop of 540,000.The number has fallen by more than 2.5 million since the start of the decade, when it stood at 25.9 million.A government review of the BBC’s Royal Charter is underway, examining its funding model.Culture Secretary Lisa Nandy has already labelled the licence fee “unenforceable” and “insufficient”, while the BBC has said that it is “willing to consider radical options for future funding”.Here is a look at how the licence fee works and potential options for its replacement.Matt Brittin bega