TV Licence monthly direct debit means you may have to pay extra

MumFromDerbys

I've only just discovered this so apologies if everyone else is already aware of it.

I checked my monthly direct debit payment plan on the TV Licensing website this morning. My annual licence runs from end of September to end of the following September. The cost of an annual TV Licence is £154.50.

My payment plan showed that the 12 direct debits I will pay for October 2019 - September 2020 comes to a total of £156.76. I was confused - why am I paying £2.26 more than the annual fee? I have never missed any payments so it couldn't be that my account was in arrears in any way. I phoned TV Licensing who told me that the licence fee went up in April 2019 so the extra I have to pay this year (Sep 19 - Sep 20) is because I owe them for the increase from April 2019 - September 2019. I told them this was ridiculous - how can they charge more for the licence mid way through the year?!

It seems that if you buy your licence as a one-off annual payment (as I used to do) then you pay the going rate at the time - so if I'd have bought my licence in September 2018 it would have cost me £150.50. Because I paid by direct debit over 12 months I have had to pay 6 months at a rate of £150.50, and 6 months at a rate of £154.50. My licence has therefore cost me £2 more than if I bought it as a one-off payment in September 2018. If I'd have made the one-off payment of £150.50 in September 2018 my licence would still have been valid until end of September 2019 and they could not have charged me any extra for it.

It seems to me that TV Licensing are misleading us - they advertise and promote that it costs no more to pay monthly direct debit instalments for the ANNUAL licence than it does to make a one-off payment. However, this is untrue as I've found out today.

It also seems to me that if you pay by monthly direct debit you are effectively being charged for a MONTHLY licence, not an ANNUAL one, so that they can increase the charge for the licence AFTER you've bought it. I believe this is unfair and is being kept very quiet by TV Licensing… I wonder how long this has been going on for?

Has anyone else come across this?

Penguin_

Don't you pay for last 6 months of the current 12 month period & the first 6 months of the coming 12 month period?

roddydogs

Just pay yearly, then.

MumFromDerbys

Probably, but I (stupidly!) hadn't realised the implications of this.

Yes, I will start paying yearly again.

…annoyed with myself for not realising this earlier :-(

brewerdave

Penguin_ wrote: »

Don't you pay for last 6 months of the current 12 month period & the first 6 months of the coming 12 month period?

Yup - it even explains that on the renewal notice.

molerat

You start paying for the next licence 6 months before it is due but you still have to pay the price of the licence at the time it becomes due which is why you get a mid term price change. You will still pay the same price for the particular year whichever method you choose.

Cornucopia

This payment scheme does tend to confuse people, but there isn't actually anything fishy going on - it's just unduly complicated, and not very well explained.

The crucial point is that there are two cycles running: the monthly payment plan and the underlying Licences. The monthly payments accumulate over time, and the Licence cost is invisibly taken annually on the anniversary of the original start date.

Also, the first 6 months are different, because you pay double instalments so as to be able to get to the 6 month point with the first year's Licence fully paid for.

MumFromDerbys

Thanks for the explanations everyone. I’m trying to get my head around most of our financial stuff - necessary now as my wonderful husband of 41 years died in July this year (he was only 64 years old) and he tended to deal with, and manage, most financial things for us (so I’ve relied on him and haven’t needed to understand the ‘finer points’ so to speak). Finance is an area which, when you’ve not needed to worry about it in the past, makes you feel very lonely, alone, and rather stupid when you need to take it all on unexpectedly...

Sorry to have wasted everyone’s time. :-(

Cornucopia

MumFromDerbys wrote: »

Sorry to have wasted everyone’s time. :-(

We're always happy to answer genuine questions, and TVL questions have a habit of not being particularly straightforward.

Please don't be put off asking questions about your finances - there are lots of helpful people on these boards who are only too happy to help.

Sorry for your loss.