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The annual television licence fee will increase from £157.50 to £159 from April 1, 2021.
The £1.50 increase in price was announced on Monday afternoon.
It's not as significant an increase in last year, when the cost went up from £154.50.
Money raised from the licence fee pays for BBC shows and services, as its mission is to "act in the public interest" and provide "impartial, high-quality and distinctive" content.
The Government is responsible for setting the level of the licence fee and had announced in 2016 it would rise in line with inflation for five years from 1 April 2017.
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The news comes after reports that some 750,000 OAPs have refused to fork out for a TV licence following the BBC's decision to start charging those over 75.
The free licences had been provided by the government since 2000, but responsibility was passed to the BBC as part of its last licence fee settlement in 2015.
In June 2019, the BBC announced free licences for over-75s would be scrapped, and delayed implementation until August 1 2020 due to the coronavirus pandemic.
A Sunday Mirror investigation found that 750,000 OAPS had not paid since the new rule came into force.
If they don't pay up the BBC will have a £117million black hole to fill.
Continuing the subsidy in full would cost £745million a year – which the broadcaster says it cannot afford.
If pensioners continue to hold out they could be taken to court, fined up to £1,000 and jailed if they refuse to pay the penalty.
Dennis Reed, director of pensioner campaign group Silver Voices, claims elderly Brits have been bombarded with aggressive reminder letters while self-isolating.
"The BBC has made a total pig's ear of this and if the courts start fining and jailing the over-75s their roof will fall in," he told the Mirror.
Meanwhile a new poll has found 56% of respondents support getting rid of the licence fee and switching the BBC to a subscription-based model.
The state broadcaster has recently attracted criticism from both sides of the political spectrum, with some accusing it of a left-wing bias while others say it skews too far to the right.
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