The Culture Secretary has warned BBC chiefs the licence fee must rise by "an appropriate amount".
Lucy Frazer said the planned increase would be a "very high level" and promised an announcement on it would arrive "very shortly".
Seeking savings
Her comments come as the Beeb is seeking to make £500 million of savings in the face of high inflation and a two-year freeze to the price of a TV licence, which provides most of its funding.
Prime Minister's stance
Last week the Prime Minister said "final decisions haven't been made" about the future of the licence fee but the broadcaster should be "realistic" about what they can expect people to pay as they grapple with cost-of-living pressures.
Expected cost increase
A rise with the expected inflation rate would take the cost to £173.30.
Concerns over high level
Speaking to Sky News today, Ms Frazer hinted the licence fee would not see such a significant increase.
She said: "I'm concerned that that's a very high level. It's a decision that I'm looking at at the moment and we'll be making an announcement on this very shortly."
"It is due to rise, but we want to make sure that it rises by an appropriate amount that people can afford.
"The media landscape is changing. 400,000 people did not renew their licence fees last year. And that's why I'm also doing a broader review on the licence fee in the round and how we should fund the BBC."
Prime Minister's perspective
Speaking while on his trip to Dubai for the Cop28 climate summit, the Prime Minister said about the licence fee: "The BBC like any other organisation that serves the public should be looking to do that and cut its cloth appropriately so I think that is very welcome.
"I think going forward, look the BBC – final decisions haven't been made obviously – but the BBC should be realistic about what it can expect people to pay at a time like this. That, I think is the right approach."
Cost-saving initiatives
The BBC is cutting its flagship show Newsnight to a 30-minute format, axing more than half of its 60 jobs, as part of a broader cost-saving initiative that includes relocating BBC News At One to Salford and extending BBC Breakfast.
These changes, along with a shift towards digital storytelling and reduced TV packaging, are expected to save the corporation £7.5 million.
BBC's response
A BBC spokesperson said: "The Government and BBC agreed a six-year licence fee settlement in January 2022, which froze the licence fee for two years with increases in line with inflation from 2024.
"As is usual practice the Government sets and confirms the cost of a licence each year and this remains unconfirmed for 2024/25. The BBC will continue to focus on what it does best: working to deliver world-class content and providing great value for all audiences."
