Microsoft has announced a scheduled update to its commercial pricing, effective from 1 July 2026. This change reflects the significant expansion of the Microsoft 365 suite, which now includes advanced AI capabilities, enhanced security tools, and streamlined device management as standard.
Summary of Pricing Adjustments
While some plans, such as Business Premium and Office 365 E1, will remain at their current rates, several core subscriptions will see a price increase. Below are the expected adjustments with indicative GBP equivalents based on current exchange rates:
- Microsoft 365 Business Basic: Increasing from $6.00 to $7.00 (approx. £5.50) per user/month.
- Microsoft 365 Business Standard: Increasing from $12.50 to $14.00 (approx. £11.10) per user/month.
- Microsoft 365 E3: Increasing from $36.00 to $39.00 (approx. £31.00) per user/month.
- Microsoft 365 E5: Increasing from $57.00 to $60.00 (approx. £47.70) per user/month.
- Frontline Plans (F1 & F3): Increasing to approx. £2.40 and £8.00 respectively.
Note: Final UK pricing in GBP will be confirmed by Microsoft closer to the effective date and may vary based on the prevailing exchange rate at that time.
Why the Increase?
The update follows the integration of several high-value services into the standard licences:
- Built-in Security: Microsoft Defender for Office 365 (Plan 1) is being added to E3 plans, and URL protection is being extended to Business Basic and Standard users.
- AI Integration: Copilot Chat and new ‘Agent’ capabilities are being embedded directly into the core Office apps.
- Management Tools: Advanced endpoint analytics and remote help tools are being included to help IT teams maintain more secure and efficient environments.
Next Steps for Your Business
We recommend reviewing your current licensing estate well in advance of the July 2026 deadline. This early notice provides an opportunity to:
- Audit Usage: Ensure you are only paying for the seats you actively need.
- Lock in Rates: Depending on your renewal cycle, there may be options to secure current pricing for a further 12 months before the increase takes effect.
- Consolidate Tools: Evaluate if the new built-in security features allow you to retire costly third-party subscriptions.
If you have questions regarding how these changes impact your specific billing or would like to discuss your licensing strategy, please get in touch with our team.