Microsoft has confirmed that commercial prices for several Microsoft 365 plans will increase from 1 July 2026. For UK small and mid-sized businesses, this means higher monthly costs on two of the most popular plans — unless you take action before the deadline.
Here’s what’s changing, what it means in pounds and pence, and what you can do about it.
What’s Changing
The increases affect list prices globally, with UK pricing rising by equivalent percentages. The plans most UK SMEs use are hit hardest:
| Plan | Current Price | New Price (from July) | Increase |
|---|---|---|---|
| Business Basic | £4.90/user/month | £5.75/user/month | 17.3% |
| Business Standard | £10.30/user/month | £11.55/user/month | 12.1% |
| Business Premium | £18.10/user/month | £18.10/user/month | No change |
All prices exclude VAT. Frontline worker licences (F1 and F3) are seeing even steeper rises of up to 33%, which will affect businesses with shift-based or field staff.
Key takeaway: A 25-person business on Business Standard will pay roughly £375 more per year after July. That’s not catastrophic, but it adds up — especially if you’re paying for licences you don’t actually need.
Why Is Microsoft Raising Prices
Microsoft points to the expanded capabilities now built into every subscription — improved security tools, compliance features, and the rollout of Copilot Chat (the basic AI assistant) across all eligible tenants at no extra cost.
Whether that justifies a 17% rise on the entry-level plan is debatable, but it’s worth noting that Business Basic hasn’t increased since 2022. Microsoft is also clearly steering customers towards annual commitments and higher-tier plans where margins are better.
The June Deadline: Lock In Current Pricing
If you renew your annual subscription on or before 30 June 2026, you lock in today’s pricing for the full 12-month term. The new prices won’t apply until your next renewal after that — potentially not until mid-2027.
This is the single most impactful thing you can do. If your renewal date falls in July or later, speak to your IT provider now about bringing it forward.
Key takeaway: Renewing before 1 July could save a 25-person Business Standard customer roughly £375 over the next year.
Five Steps to Cut Your Microsoft 365 Bill
A price increase is actually a good prompt to review what you’re paying for. Most businesses we audit have at least a few quick wins:
1. Remove unused licences. The average organisation has 20-25% of licences sitting inactive or unassigned. Check your Microsoft 365 admin centre — you may be paying for people who left months ago.
2. Right-size your plans. Not everyone needs Business Standard. Reception staff, part-time workers, and contractors who only use email and Teams may be fine on Business Basic — or even a standalone Exchange Online plan at around £3.30/month.
3. Switch to annual billing. If you’re on monthly billing for flexibility, you’re paying a premium of 15-20%. For most SMEs with stable headcounts, annual commitment is the better deal. Keep a small buffer of monthly licences for temporary staff.
4. Review add-ons. Check whether you’re paying separately for tools that are already included in your plan — things like Microsoft Defender, Intune, or Azure Information Protection that come bundled with Business Premium.
5. Run a proper licence audit. Export your licence list, cross-reference it with your staff directory and actual usage data from the admin centre. A structured review typically saves UK businesses between £100 and £500 per month.
What About Copilot
Microsoft now includes basic Copilot Chat in all eligible Microsoft 365 tenants at no extra charge. The full Copilot for Microsoft 365 — which works directly inside Word, Excel, PowerPoint, and Outlook — remains a paid add-on.
If your provider is bundling Copilot into a quote alongside the price increase, make sure you understand what’s included by default and what’s genuinely additional. Don’t pay twice for something you’re already getting.
What We’d Recommend
Don’t just absorb the increase. Use the next three months to:
- Audit your current licences and remove waste
- Right-size plans to match what staff actually use
- Lock in current pricing by renewing before 1 July
- Talk to your IT provider about whether your current plan mix is still the best fit
A 15-minute conversation now could save you hundreds of pounds over the next year.
Want help reviewing your Microsoft 365 licences before the July price increase? Get in touch for a free licence audit.
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