I have literally just gone through this process today.
Description on http://www.radiolicencecentre.co.uk/rlc/
was a bit misleading when I first read it, but essentially it's free to renew or take out a new license via paper form (but only until 1st dec when free online system goes live - after then there will be an admin fee for paper forms). I called them and they were very helpful and told me to simply ignore the section re payment on the application form.
Form can be downloaded from http://www.ofcom.org.uk/
(search for of62), filled in and posted to the address on the form.
No excuse not to have a license.....