TV Licence Fee Fiddle?

rtbcomp

I've just bought a colour TV licence and pay by monthly direct debit.

The next 12 payments are:
£30.90
£30.90
£30.90
£30.90
£30.90
£12.93
£12.87
£12.87
£12.87
£12.87
£12.87
£12.87
Which is a total of £244.65, £90.15 more than the cost of the licence.

The next and subsequent 12 months payments will be (assuming no licence fee increase):
£12.93
£12.87
£12.87
£12.87
£12.87
£12.87
£12.87
£12.87
£12.87
£12.87
£12.87
£12.87
£12.87
Which is a total of £154.50, exactly the cost of the licence.

Does this seem right? All other direct debits I've taken out divide the annual cost by 12 and that's what I pay.

With the TV licence I've paid out an extra £90.15 which I can't really afford.

Will I get this back when I become eligble for a free licence when I reach 75 in a few years time?

Cornucopia

Yes - you have to pay for the first annual Licence over the initial 6 months of the scheme. After that, you'll always be in credit on the scheme until you leave it for whatever reason.

https://www.tvlicensing.co.uk/pay-for-your-tv-licence/ways-to-pay

The idea is that there is no financial benefit of paying monthly compared to paying annually.

tempus_fugit

I think it's paid for six months in advance, hence the higher payments for the first six months.

JennyJukes

The same thing happened to me and the same thing happens when I've attempted to set up a DD for my clients who are on benefits or low income. To which they generally say it's unaffordable and don't pay it at all. I understand it's so you're in credit but you don't receive the money you overpay back, right?

flashg67

JennyJukes wrote: »

The same thing happened to me and the same thing happens when I've attempted to set up a DD for my clients who are on benefits or low income. To which they generally say it's unaffordable and don't pay it at all. I understand it's so you're in credit but you don't receive the money you overpay back, right?

You can apply for a refund at any time and get refund on any remaining complete months

Mr_Singleton

Cancel the DD after 6 months.... simple really.

iniltous

I suppose , if you don’t like the idea of being 6 months in credit by paying TVL on the monthly plan , so in effect lending TV licensing around £75 ,even though the cost is interest free , and should you not require the licence anymore , you can be refunded the unused period anyway, the alternatives are, pay in full at the start of the period, and in 12 months do the same again, if you don’t have the 12 month price, borrow the approx £150 , pay in TVL full, and pay back the lender , over the 12 months , the £150 plus whatever interest they charge ( this may not be very attractive though,) certainly more that what £75 in a bank account would earn in interest.
TBH , there aren’t many organisations that just split an annual fee into 12 , as the monthly payment option, and those that do may, as is the case with some car insurance company’s , either charge a penalty for early cancellation , so if you cancel early , you may get a pro rata refund but most of it is swallowed up by the ETC, or they call it a credit argument and you pay interest.
IMHO, the TV licence monthly payment scheme (which is interest free and although you are required , in effect , to be 6 months in credit, is refundable ) is a pretty good deal.