While many price increases are often seen negatively, this change does bring benefits with some exciting new additions into different licence levels to really add value.
From 1st July 2026 Microsoft will be increasing the cost of most of their Microsoft 365 licences. The last price increase was in 2022 and while nobody ever enjoys price increases, this time it is coming with some valuable additional features that you should be aware of and ready to take advantage of.
Please note that while the last price increase set from Microsoft was in 2022, pricing can increase and decrease based on exchange rate fluctuations – these are reviewed twice per year and adjusted on a local level. The last change in the UK was last year in February 2025 where pricing decreased due to GBP exchange rates.
Nearly all licences will increase – with the exception of Microsoft 365 Business Premium, which is welcome news as it is one of the licence SKUs we recommend the most to SMBs. Below is a breakdown of the price changes per SKU. Please note that these are in USD as we do not have £GBP pricing yet.
Most organisations will have annual commitments, so you will not be impacted by these new prices until your renewal anniversary. For those on monthly commitments, the new price will come into effect immediately.
Image source: Microsoft
The new features are fairly heavily focused on Copilot – understandably, as it’s a huge area that Microsoft are heavily investing into, as AI continues to dominate their strategy. Alongside Copilot features being added to all licences there are a number of really beneficial additions that we are excited for.
The below table from Microsoft breaks down all the new features coming to each licence – however a few points that we would like to call out:
Image Source: Microsoft
While there are a number of other security enhancements that are good to see, we would still recommend adding on Microsoft Defender Suite to Microsoft 365 E3 or Microsoft Defender Suite for Business for Microsoft 365 Business Premium (both of these add-ons include all the same features, just the Business Premium version is a little more cost effective).
This brings the full power of Microsoft’s security solutions, giving integrated security capabilities – and when combined with Microsoft MDR or MXDR services – give full managed security monitoring and threat response across your entire estate.
If you are using Microsoft 365 then it is worth considering the new features that will be available to you from July. There could be potential SKUs that you no longer need, so a licensing review would be worthwhile to ensure you will have the most appropriate and cost effective licensing for your needs.
If you need support with your Microsoft licensing or implementing and managing any of the available products, please get in touch. We are one of the top Microsoft solutions partners in the UK, helping customers across the Microsoft Cloud (Microsoft 365, Azure and Dynamics 365).