Upfront payments for TV Licence?

dank_2

I am struggling to get my head around paying monthly for my TV Licence. I think I'm missing something?

I currently pay it by quarterly direct debit at £41.00 every three months, which includes an extra £1.25 charge. The total annual cost is £164.00. With the TV Licence increasing next year, I thought I would pay monthly instead and save myself the £5.00 extra charge.

Then I found out you have to pay double upfront for the first six months.

Over the course of the first year, the total payment is £238.50? That's £74.50 more than quarterly payments. After that, paying monthly is £5.00 a year cheaper, but it would take nearly 15 years (£74.50 divided by 5) before I start making a saving?

Like I said, I'm probably missing something?

Brie

The savings you make are instantaneous as the monthly amount is 1/12 of the annual after the first 6 months.  At that point you are paying for use your will have in 6 months time. 

Over the length of time you are paying quarterly you will always be that extra £5 a year out of pocket.  The only way you might be considered out of pocket by going monthly is that you might be keeping 6 months of payments in a high rate savings account instead.  At 5% that might get you £4 in a year so you're close to breaking even.   

dank_2

I still don't get it 

No other service makes you pay double upfront or pay in advance? I don't understand why they can't just charge £13.25 a month from day one. A bit morbid, but does the extra six months get paid back when I pop my clogs?

Brie

Insurance is normally paid annually in advance. If you pay monthly you aren't paying off the insurance you are paying off a credit agreement that includes the price of the insurance with interest added.  

And then there's all that credit we build up with utility companies. 

TV license is the single one I don't mind paying in advance.  That said I don't pay monthly I pay annually up front.  

One thing you can do with the TV license is pay double for 6 months and then cancel your DD until the year is up and then start again.  I did this a few times when money was a bit tight. 

Brie

Oh and as for popping any clogs.....it's also the easiest organisation to get a refund from (unusual considering it's Capita that runs it).  So if after 8 months you want to cancel your DD they are very quick to refund the 2 extra months paid for.  

dank_2

Brie said:

One thing you can do with the TV license is pay double for 6 months and then cancel your DD until the year is up and then start again.  I did this a few times when money was a bit tight. 

That's not a bad idea!

I kinda understand the pricing model now, but it still seems slightly archaic in a world of Netflix and Spotify that you can't just pay the same set amount each month. 

p00hsticks

dank_2 said:

I still don't get it 

No other service makes you pay double upfront or pay in advance?
<snipped>
A bit morbid, but does the extra six months get paid back when I pop my clogs?

If you pay for your TV license annually, then you are paying for the whole year in advance. 
And yes, your estate would get a refund if you died

Neil_Jones

dank_2 said:

I still don't get it 

No other service makes you pay double upfront or pay in advance? I don't understand why they can't just charge £13.25 a month from day one. A bit morbid, but does the extra six months get paid back when I pop my clogs?

Car Insurance.

Council Tax.

Other forms of insurance

Rent is paid up front.

Your internet is paid in advance.

If you pay for Sky/Virgin, you pay for that in advance.

Need I go on?

And its not "double" up front, you're paying for effectively two licences in the first year - all of the first one and half of the second one..

It tells you this on the website:https://www.tvlicensing.co.uk/pay-for-your-tv-licence/ways-to-pay/direct-debit - "We'll usually spread the cost of your first Direct Debit licence over six months, at around £26.50 a month. From then on you’ll pay around £13.25 a month."

maisie_cat

We used to pay our TVL monthly and when we transferred to annually we had a 6 month payment gap because we'd already paid for the 6 months after the notice was given. Half in advance and half in arrears is not that complex

Cornucopia

dank_2 said:

I still don't get it 

No other service makes you pay double upfront or pay in advance? I don't understand why they can't just charge £13.25 a month from day one. A bit morbid, but does the extra six months get paid back when I pop my clogs?

As above - it's not so much paying double as paying in advance.  The Licence is an annual tax, and it is normally payable annually in advance.  

The additional 6 months credit will be refunded if you ever cancel your Licence or if you change your payment method.

I think it may be possible to game the system by paying for 6 months on instalments (@ c. £23pm), and then canceling or changing to an annual Licence.   I think in that latter case you will then be offered 6 months payment free, and then at the end of that you can go back on instalments, and go round again.

Obviously, the cheapest Licence is not needing a Licence at all...

https://www.moneysavingexpert.com/broadband-and-tv/tv-licence/

wild666

dank_2 said:

I am struggling to get my head around paying monthly for my TV Licence. I think I'm missing something?

I currently pay it by quarterly direct debit at £41.00 every three months, which includes an extra £1.25 charge. The total annual cost is £164.00. With the TV Licence increasing next year, I thought I would pay monthly instead and save myself the £5.00 extra charge.

Then I found out you have to pay double upfront for the first six months.

Over the course of the first year, the total payment is £238.50? That's £74.50 more than quarterly payments. After that, paying monthly is £5.00 a year cheaper, but it would take nearly 15 years (£74.50 divided by 5) before I start making a saving?

Like I said, I'm probably missing something?

If you can afford it pay a lump sum, cancel the DD and take out a new licence on 1/3/24 then you get 11 months at £159 then you can revaluate the payment in Feb 2025 as to whether to get another licence or not.