Microsoft 365 price increase 2026: How businesses can act now & save cost
From 1 July 2026, the price of Microsoft 365 is increasing. Depending on which plan you subscribe to, your subscription will cost anything from 5% to 33% more.
If you plan to continue your subscription, and your renewal point is approaching, there is still time to lock in today’s prices for another year.
Renew your subscription before 30th June, and depending on the contract you choose, you can defer the price increases for 12 or even 36 months.
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What’s changing about Microsoft 365 pricing in 2026?
From the beginning of July 2026, the price of most Microsoft 365 licences is increasing. This includes the plans most used by small-to-medium-sized enterprises and by UK non-profit organisations.
The things you need to know:
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Any customer who signs up on or after 1 July 2026 will automatically pay the new, higher price for their subscription.
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Existing customers will switch to the new prices when their contract comes up for renewal, unless they renew before that date.
- Exact UK pricing won’t be available until late May, but will mirror the percentage increases below.
| Plan | Current price | New price | % increase |
| Microsoft 365 Business Basic | £4.60 | £5.33 | +16% |
| Microsoft 365 Business Standard | £9.60 | £10.75 | +12% |
| Microsoft 365 Business Premium | £16.90 | £16.90 | 0% |
| Microsoft 365 E3 | £31 | £33.48 | +8% |
| Microsoft 365 E5 | £49 | £51.45 | +5% |
| Microsoft 365 Frontline F1 | £1.73 | £2.30 | +33% |
| Microsoft 365 Frontline F3 | £6.20 | £7.75 | +25% |
Note: GBP prices are indicative only. Official pricing will be available soon.
The reason for this pricing update, according to Microsoft, is the more than 11,000 extra features it has added to Microsoft 365. These new features and functions include:
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Copilot Chat enhancements:
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Copilot Chat now includes inbox and calendar awareness, as well as access to Word, Excel, and PowerPoint.
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IT administrators now have integrated, enterprise-grade controls to secure, manage, and measure Copilot Chat
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Enhanced email security: ‘safe link’ URL checking has been added to protect users against phishing, malicious links and other threats.
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Extra email storage: Microsoft has added 50GB of extra email storage per mailbox for Microsoft 365 Business licences.
- And a lot more features added for Microsoft Defender, Microsoft Intune and Microsoft Security Copilot.
Microsoft licence prices for non-profit organisations are also changing
Microsoft calculates non-profit discounts as a percentage of its commercial prices. Because of this, UK non-profit prices are also changing from 1 July, 2026.
300 of Microsoft 365 Business Basic licences will still be free for eligible non-profits. To understand if your organisation is eligible, read our guide to Microsoft 365 discounts for non-profits and charities.
| Plan for nonprofits | Current price | New price | % increase |
| Microsoft 365 Business Basic | Free for 300 licences | Free for 300 licences | - |
| Microsoft 365 Business Standard | £2.30 | £2.69 | 17% |
| Microsoft 365 Business Premium | £4.20 | £4.20 | 0% |
| Microsoft 365 E3 | £7.70 | £8.31 | 8% |
| Microsoft 365 E5 | £19.60 | 20.58 | 5% |
| Microsoft 365 Frontline F1 | £0.41 | £0.54 | 33% |
| Microsoft 365 Frontline F3 | £1.48 | £1.85 | 25% |
Note: GBP prices are indicative only. Official pricing will be available soon.
Read our article on Microsoft grants and discounts for nonprofits to learn more ways your organisation can save costs on Microsoft products.
The following licences are not affected by the price increase:
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Microsoft 365 Business Premium
- Microsoft Office 365 E1
The golden window: renew Microsoft 365 licences before 30th June
For businesses that want to secure the lower price, now is the right time to renew. The price you renew at remains locked in for at least a full year.
If you renew before June 30, you can:
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Lock in the lower price until June 2027, with any annual Microsoft 365 subscription.
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Lock in the lower price for three years, with a 36-month Microsoft 365 E5 licence.
Compared to a monthly subscription, annual subscriptions are cheaper per month. If you currently pay for your Microsoft 365 licences monthly, switching to an annual subscription will save 10-20%.
Similarly, you will save a significant amount of licensing cost if you switch from an annual or monthly plan to a 36-month contract (only for E5) through a Microsoft Cloud Solution Provider (CSP).
Switching to a longer-term plan before 30th June can help you save twice over. Divided over the year, the monthly price of the 36-month contract is cheaper than that of the annual or monthly contract. And you lock in the current, lower price even after the price increase has come into force.
If you’re partway through your subscription, there are two scenarios:
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If you’re mid-term on your current subscription (renewal date after 1 July): your price stays the same until you renew, and the new prices will apply. You can’t renew early, so no action is required.
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Your next renewal is before 1 July: you can renew your subscription at the current, lower price, to lock that price for at least another year.
Note: the 36-month contract is only available through a Microsoft Cloud Solution Provider (CSP) such as Texaport.
Before you renew, have your Microsoft 365 licences audited
Before renewing your Microsoft 365 licences, instruct your provider to audit your licences. This reduces the risk of paying for features or even seats you don’t need.
A good pre-renewal, or pre-purchase, licence audit will spot things such as:
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‘ghost users’ whose licences can be removed or reassigned.
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users who may be “over-provisioned” because they are on the wrong plan.
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unused add-ons and features that are inflating your licensing costs. As Microsoft increases mailbox sizes by 50 GB for all Business licences, some Exchange storage add-ons or upgrades may no longer be required.
A comprehensive audit can also help you catch issues such as inefficient billing choices. Switching to annual billing can save you up to 20% if you do it before July 2026.
An audit will also find any users who should upgrade to Microsoft 365 Business Premium. With the price of Business Premium unchanged, while Business Standard is 12% more expensive, the cost gap is at its narrowest ever. For businesses that need both extra features and security, this is the perfect time to upgrade.
Your provider should automatically audit licensing before renewal as part of the service it offers you. If you are unsure, contact us for help with a licence audit and optimising your licensing usage.
Microsoft 365 Business Premium: same price, greater value
Microsoft 365 Business Premium is not part of the 2026 price increase. Its subscription cost remains unchanged at £16.90 per user per month.
In contrast, the price of Microsoft 365 Business Standard is rising by 12%. This means that the price gap between the two will be narrower than ever.
Microsoft 365 Business Premium has all the same productivity, content, AI and other tools as Business Standard. But it also comes with advanced security, data protection, and information management tools (see the table below).
These features allow you to discover and protect sensitive information as well as enforce data-access restrictions based on country, device management, or multi-factor authentication (MFA) status.
Because of this, Microsoft 365 Business Premium provides a way to easily combine productivity, value and advanced security. This makes it an even better value proposition than it was before the recent price increases.
| Feature | Microsoft 365 Business Premium | Microsoft 365 Business Standard |
| Microsoft Entra ID | - | |
| Windows Hello for Business | - | |
| Azure Virtual Desktop | - | |
| Microsoft Intune | (Plan 1) | - |
| Microsoft Defender for Office 365 | (Plan 1) | - |
| Microsoft Defender for Business | (Plan 1) | - |
| Microsoft Purview Data Loss Protection | (Emails and files) | - |
| Microsoft Purview Information Protection | (Plan 1) | - |
What to do next
To get ready for the Microsoft 365 price increases and get the best value of features and productivity:
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Audit your licences
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Decide on any licensing changes required to get the best value.
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Renew before 30th June to lock in the lower pricing.
Texaport is an official Microsoft Partner and leading UK Microsoft 365 specialist. As you plan your renewal strategy with us, our engineers will help you simplify your Microsoft 365 licensing, control costs, and ensure your team is set up for the way they work. Get in touch today.
