| 8 May 2026
Microsoft 365 Price Increase 2026: A Guide for UK Businesses
If your business relies on Microsoft 365 for email, document storage, or day-to-day tools like Word and Teams, you need to know about a significant price change coming in July 2026. Microsoft has confirmed that it is increasing the cost of most commercial Microsoft 365 plans globally, with some licences going up by as much as 43%. For UK businesses already keeping a close eye on budgets, this Microsoft 365 price increase could add a noticeable amount to your annual IT costs.
The good news is that you are not powerless. There are practical steps you can take now to soften the impact, protect your budget and make sure your business is not paying for more than it needs. This guide explains exactly what is changing, which plans are affected, what you can do about it and how a managed IT service provider like Omnia Systems can help you navigate the changes confidently.
Table of Contents
What Is Changing and When?
Microsoft announced in December 2025 that it would be raising prices across most of its commercial Microsoft 365 plans, with changes taking effect on 1 July 2026. Depending on which plan your business currently uses, you could be looking at an increase of anywhere between 5% and 43%.
The changes apply to both new customers and existing customers who are renewing after 1 July 2026. If your subscription renews before that date, you will keep your current pricing until your next renewal.
Microsoft has stated that the increases reflect the significant investment it has made in new features, particularly around artificial intelligence tools such as Copilot, enhanced security features, and improved IT management tools. The company says it has delivered over 1,100 new features and capabilities across the platform in recent years, and that the price changes reflect this added value.
Which Plans Are Affected?
The increases vary depending on the plan your business is on. Here is a straightforward breakdown of the key changes based on Microsoft’s published list prices in US dollars, which will be reflected in equivalent percentage increases in pound sterling:
Microsoft 365 Business Basic is increasing by approximately 17%,
Microsoft 365 Business Standard is increasing by approximately 12%
Microsoft 365 E3 is increasing by approximately 8%
Microsoft 365 E5 is increasing by approximately 5%
Microsoft 365 Frontline F1 and F3 plans are seeing some of the steepest increases, with rises of between 25% and 43% depending on whether Teams is included.
Why Is Microsoft Increasing Prices?
Microsoft has been clear about its reasoning. The company points to the enormous investment it has made in expanding the platform since the last major price increase, which took place in 2022. Since then, it has embedded artificial intelligence tools across its applications, significantly improved its security and compliance features and added device management capabilities that previously required separate, paid add-ons.
In Microsoft’s own words, the company has introduced over 1,100 new features and capabilities across security, compliance, artificial intelligence and collaboration.
Which Plans Are Not Increasing?
Microsoft 365 Business Premium is not increasing in price. This is an important detail for small and medium-sized businesses. Business Premium sits above Business Standard in terms of features, particularly around security. Because Business Standard is increasing by around 12% while Business Premium stays the same, the price gap between the two plans is now much smaller than it used to be.
This means that for some businesses, it may make sense to move up to Business Premium rather than simply absorbing the increase on their existing plan. Business Premium includes more advanced security tools, device management through Microsoft Intune and better protection against online threats.
Office 365 E1 is also remaining at its current price. However, it is worth noting that E1 does not include the desktop versions of Office applications, so it is suited to businesses with more basic requirements.
What Can You Do Right Now?
There are several steps your business can take to reduce the impact of the Microsoft 365 price increase.
The first step is to find out when your current subscription renews. If it renews before 1 July 2026, you can renew early and lock in your existing pricing for another 12 months. If you are on a multi-year agreement, your current pricing is protected until that term ends, so there is nothing to action immediately.
The second step is to audit your current licences. Remove any accounts that belong to former employees, reduce licences for users who only need basic access and check whether everyone is on the right plan for what they do.
The third step is to consider whether your current plan is still the best fit. With Business Premium holding its price while Business Standard increases, now is a good time to weigh up the difference in what each plan offers and whether the additional features of Business Premium make sense for your team.
How a Managed Service Provider Can Help
Navigating Microsoft 365 licensing can be confusing, even without a significant price change upcoming. Understanding which plan is right for your business, how many licences you need and when to renew to protect your budget all require time and knowledge that many business owners simply do not have spare.
This is where a managed IT service provider can make a real difference. At Omnia Systems, we work with small and medium-sized businesses across the Midlands and North West of England to manage exactly this kind of situation. We have been supporting businesses with their IT since 2011, and licensing reviews are a core part of what we do.
As a trusted IT partner, Omnia Systems can carry out a full review of your current Microsoft 365 licences to identify where you might be overspending. We can check which accounts are active, which features are in use and whether the plans your team is on are the right fit for your business.
We can also help you time your renewal correctly to make the most of the window before the July 2026 price increase takes effect. If your renewal is coming up soon, we can work with you to make sure you lock in your current pricing and avoid paying the new rates for as long as possible.
Frequently Asked Questions About the Microsoft 365 Price Increase
When does the Microsoft 365 price increase take effect?
The new pricing applies from 1 July 2026. Existing customers will see the new prices at their next renewal after that date.
Which Microsoft 365 plans are not increasing?
Microsoft 365 Business Premium and Office 365 E1 are not increasing in price under this update.
Can I lock in my current pricing before July 2026?
Yes. If your subscription is due for renewal, renewing before 1 July 2026 will lock in your current pricing for the duration of that term. The recommended deadline for getting this processed is around 20 June 2026.
Does the price increase affect personal Microsoft 365 subscriptions?
No. These changes apply to commercial and business plans only. Personal and family subscriptions are not affected by this update.
What new features am I getting with the price increase?
Microsoft is adding Copilot Chat enhancements, improved security tools including Microsoft Defender for Office 365, better device management through Microsoft Intune, and additional mailbox storage to various plans between June and August 2026.
How can I reduce the impact of the price increase?
Auditing your licences, removing unused accounts, reviewing whether you are on the right plan and renewing early are all practical ways to reduce the financial impact.
What Omnia Systems Customers Should Know
If you are an existing Omnia Systems customer, you do not need to worry about working through the details of this on your own. Our team is already aware of the upcoming changes and can help you understand how they affect your specific setup.
We will work with you to review your licences, identify whether your current plan is still suitable and advise on the best time to renew. Our goal is always to make sure you are getting the right level of service for your business without paying for things you do not need.
If you are not yet a customer but are concerned about how the Microsoft 365 price increase will affect your business, we are happy to have a conversation. You can reach us through our website or by calling our team directly. There is no obligation, and we will give you straightforward advice based on your situation.
Next Steps
For UK businesses, the impact will vary depending on which plan you are on and when your subscription renews. But with the right preparation, you can reduce the financial effect and make sure your business is set up in the most cost-effective way possible.
Some simple steps you can do now include, find out when your subscription renews, audit your licences, review whether you are on the right plan and act before the July 2026 deadline if you want to lock in your current pricing.
Contact Omnia Systems today to discuss your Microsoft 365 licences and find out how we can help you prepare for the July 2026 pricing changes.
Let us manage your IT so you can concentrate on what matters most: your business.
