Millions of households will have to start paying the £154.50 annual fee to gain access to the BBC’s live and on-demand programming.
Read more: BBC calls on top presenters for Tory leadership race debates But any household with someone aged over 75 who receives pension credit will be eligible for a free licence funded by the BBC. Roughly 1.5m households could be eligible, the broadcaster said.
Free licences were introduced in 2000 as part of a scheme to help reduce poverty levels among pensioners. But the programme was scrapped in 2015 and the government announced that the BBC would have to take over the cost burden from 2020.
The decision to scrap free licences for most pensioners comes after the BBC launched a consultation into the issue.
The corporation said the move will cost roughly £250m by 2021 and will require it to divert some spending away from programming, in addition to other cost-cutting.
But it said the compromise avoids “untenable” costs of £745m per year, roughly a fifth of its spending on services, if it had maintained the blanket free scheme.
Tom Watson, deputy Labour leader, criticised the decision and called for the government to restore the benefits.
“We have to send a message to the chancellor and the Tory leader candidates that this latest cruel austerity measure is not acceptable,” he said.
Read more: BBC retains troubled outsourcer Interserve to provide security across its UK sites Damian Collins, chair of the Digital, Culture, Media and Sport Committee, said the committee intends to question director general Hall and chairman Sir David Clementi over the results of the consultation and the impact on viewers and listeners.
The changes will come into force on 1 June 2020.