Microsoft has confirmed that commercial Microsoft 365 pricing will change from 1 July 2026, affecting new subscriptions and existing customers at their next renewal.
How much this affects you depends on the Microsoft 365 licences your business uses. Microsoft has introduced global price increases across most plans, typically between 5% and 17%, with some lower‑cost frontline licences increasing more. UK pricing is expected to increase by similar amounts.
For small and medium‑sized businesses, the most common changes include:
- Microsoft 365 Business Basic increasing by around 16–17%
- Microsoft 365 Business Standard increasing by around 12%
- Microsoft 365 E3 increasing by approximately 8%
- Microsoft 365 E5 increasing by approximately 5%
What’s driving the increase
Microsoft has linked these price changes to investment across the platform. The company states it has delivered over 1,100 new features and capabilities in recent years, particularly around security, device management, compliance, and artificial intelligence features such as Copilot and enhanced Defender protections.
For customers on Microsoft 365 Business Basic, Business Standard and Business Premium, this now includes:
- Larger mailboxes – 100GB (additional 50GB per user)
- Improved email security, including URL time‑of‑click protection
- Copilot Chat enhancements, bringing AI features directly into the Microsoft 365 environment
- Copilot Chat analytics, giving better visibility and governance over AI usage
What this means in practice
For most organisations, pricing does not change overnight. Existing customers remain on their current pricing until their subscription renews after 1 July 2026. This gives businesses time to plan – as long as you know when your renewal date is coming up.
In our experience, the bigger issue often isn’t the price rise itself, but how licences are set up. We commonly see things like:
- Licences still assigned to former staff
- Users on higher‑level plans than they actually need
- Multiple tools doing the same job
When licensing hasn’t been reviewed for a while, even a small increase can end up feeling much bigger than it needs to be.
A useful opportunity to review licensing
Microsoft’s latest pricing update will narrow the price gap between some licence tiers. For example, Microsoft has confirmed that Microsoft 365 Business Premium does not increase as part of the July 2026 update, which makes it worth reviewing whether you are now better served by that plan rather than paying more for lower tier licenses.
How we help Sussex businesses
As part of our Microsoft 365 support in Sussex, we help local businesses:
- Understand which licences they actually need
- Remove unused or unnecessary subscriptions
- Plan renewals to avoid surprises
- Make informed decisions about upgrades and security features
If you’re unsure when your Microsoft 365 subscription renews, or whether your current licences still make sense, now is a good time to review things — while you still have options.
If you’d like a straightforward Microsoft 365 licence review or advice on upcoming pricing changes, feel free to get in touch.