Free TV licence fees for over-75s are to be means-tested, the BBC has announced.
Households without someone who receives Pension Credit will now have to pay for the licence.
BBC director-general Tony Hall said the move was "not an easy decision".
From June 2020 around 3.7 million households which previously received a free licence will now have to pay for one.
It is thought 1.5 million households will be eligible for the free licence under the new scheme, which will cost the BBC around £250 million by 2021/22 depending on the take-up.
Lord Hall has announced that licence fees will now be linked to Pension Credit and will be means-tested.
"This has not been an easy decision," he said. "Whilst we know that pensioner incomes have improved since 2000, we also know that for some the TV licence is a lot of money.”
He added: “It would not be right simply to abolish all free licences. Equally, it would not be right to maintain it in perpetuity given the very profound impact that would have on many BBC services.
"This decision is fairest for the poorest pensioners. Around 1.5 million households could get free TV licences if someone is over 75 and receives Pension Credit. It protects those most in need.”
The corporation was due to take over the cost of free TV licences as part of its new charter agreement which commenced in 2017.
The shift from government to the broadcaster was being phased in, with sole responsibility set to begin from 2020, when it was estimated to cost the BBC around £725 million.
Neil Duncan-Jordan from the National Pensioners Convention said the BBC had been put in a “difficult position” by the government.
He told talkRADIO’s Matthew Wright: “The BBC were always going to make a difficult decision. The corporation has been put in a very difficult position by the Conservative government who forced them to take over responsibility for funding them.”
He added: “The problem is that the BBC has done the government’s dirty work for them.”
Caroline Abrahams, charity director of Age UK, said the BBC’s decision “will cause those affected enormous anxiety and distress.”
"Make no mistake, if this scheme goes ahead we are going to see sick and disabled people in their eighties and nineties who are completely dependent on their cherished TV for companionship and news, forced to give it up,” she said.