There are currently 24.8 million licences in force, according to BBC figures, with that figure having stood at 25.8 million two years ago.
Moreover, around 260,000 over-75s contacted by TV Licensing have yet to arrange payment.
John Whittingdale, the minister for media and data, said he expected the downward trend to continue each year.
He told the Edinburgh TV Festival: “I think it inevitable that certain trends which are now clearly visible will continue. One is the switch away from linear viewing. The second is, in the longer term, the decline in willingness to pay the BBC’s licence fee.
“And those are going to put real challenges on all the UK public service broadcasters. So the debate about how to sustain public service broadcasting is only just beginning.”
The licence fee model is guaranteed until the end of the current Charter period in 2027, but the Government has made no secret of the fact it wants reform.
Mr Whittingdale also discussed the potential privatisation of Channel 4 in a debate with James Graham, the playwright whose television dramas have included Quiz for ITV and Brexit: An Uncivil War. Graham warned that privatisation could lead to the UK becoming “a cultural colony to America”.
The Government has argued that private ownership could bolster Channel 4 in the face of competition from US streaming giants.
Read more: BBC licence fee in terminal decline as more people refuse to pay – DEFUND THE CULT-OWNED BBC