Microsoft 365 upcoming price increase: What is changing and how to prepare 

Microsoft confirmed on 4th December that a global price increase would take effect from 1st July 2026 affecting several Microsoft 365 subscriptions. 

As of the date of this article Microsoft has not released official GBP pricing but have published the USD changes: Microsoft 365 Pricing and Packaging Updates | Microsoft Licensing Resources  

Note that this is subject to change prior to 1st July. 

If you use Microsoft 365 for email, collaboration, security or device management you should be planning for this now. This blog gives you an overview of how it may affect you and what you need to review. 

When do the changes take effect? 

Whilst the pricing change applies from 1st July 2026 it will not affect you until the next anniversary of the subscription type you have. 

• If you purchase a new subscription after 1st July you will be immediately affected. 

• If you have an existing annual subscription you will not be affected until the annual renewal is due. This applies if you have an annual commitment whether you pay for the entire year up front or monthly. 

• If you have a month to month only subscription the new pricing will come into effect during the month of July depending on your anniversary day. 

Whilst Microsoft will provide notice of the changes via Microsoft 365 message centre, it is likely that only your IT provider will see the messages. 

Which subscriptions are increasing? 

Whilst Microsoft state that this is subject to change at present the following business packages are affected: 

If you are eligible for Non-Profit licencing then you are also affected: 

Whilst only USD pricing is available at this time we can expect similar percentage price increases to apply to GBP pricing and it will apply across the board irrespective if you pay annual upfront, annual commitment with monthly payments or month by month. 

Why are prices increasing? 

Microsoft has advised that this change is value based rather than inflationary pricing.  

The key changes are: 

• Expanded Intune endpoint management capabilities 

• More advanced email and collaboration security 

• Broader identity and access controls 

• Copilot chat features embedded into Microsoft 365 apps 

What should you do now? 

The price change is a good reason to review your current licencing and verify that you have the correct licences and are not carrying unneeded licences. 

One of the big advantages of this price change is that it does not affect Business Premium.  

Business Premium includes many security packages that are ideal for small business and by increasing Business Standard pricing it makes it much more affordable to get all the extra security benefits. 

Business Premium gives the following additional features: 

• Intune for device management so you can better control and manage devices 

• Conditional access so you can prevent access from unknown or non-compliant licences (or even just access from outside the UK) 

• Windows Defender for Business to replace your current endpoint security allowing security signals from all products to be reviewed together by Microsoft\’s security controls 

Whilst Cyber Essentials and Cyber Essentials plus are not dependent on the above it makes it far easier to achieve compliance when you have them in place.  

Review your renewal dates 

If you are currently on a month to month subscription it would be worth looking to see if you can make savings by locking in an annual commitment at the current pricing before July. Not only will this allow you to avoid the price increase the annual commitment subscriptions are cheaper than the month to month ones. However you are committed to an annual renewal so you can increase the subscription count but not decrease or cancel it until the anniversary date. 

If you have an annual renewal due in June, it may be worth looking at renewing early depending on whether this is commercially sensible or not. 

Whilst there are some significant percentage price increases for some packages it is essentially unavoidable for most businesses but, the good news is you can get ahead of it and if you are on Business Standard look at moving the Business premium to increase your security posture and controls. 

If you would like help reviewing your Microsoft 365 licences or planning ahead for renewal please let us know. 

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