Microsoft 365 enhancements and global price increases
With the global changes, we are not particularly surprised to hear that prices for Office 365 will be increasing. These price rises will begin on 1st July 2026 alongside the February currency price harmonising policy (see below).
(View Microsoft release)
Why the increase?
Microsoft are introducing 1,100 new features coming in 2026, one of these “new capabilities” is Copilot almost everywhere. Microsoft has now embedded Copilot across Word, Excel, PowerPoint, Outlook and Teams.
- Word and PowerPoint: Generate drafts, summarise documents and create presentations all with AI assistance in minutes.
- Excel: Get help with Formulas, create charts, and analyse data all with ease.
- Outlook: Draft emails, summarise long threads, manage your inbox. Need help softening your language or changing the tone of it. Copilot has you covered.
- Microsoft 365 Business Basic (Moving from 50GB to 100GB)
- Microsoft 365 Business Standard (Moving from 50GB to 100GB)
- Microsoft 365 Business Premium (Moving from 50GB to 100GB)
- Teams: Copilot can transcribe meetings and convert them into actionable items and summaries instantly.
- SharePoint: Microsoft has not announced any increases in Storage for SharePoint (Tenant Base 1TB + 10GB per licensed user). What they have added is:
URL Protection (Safe Links Lite): Plans like Business Basic and Business Standard will now include basic URL checking when users click links within Office files stored in SharePoint.
If you currently pay for “Exchange Online Plan 2” add-ons just to get 100GB mailboxes for certain users, you will likely be able to cancel those add-ons once this change takes effect, saving you money.
Source:
Source Microsoft https://www.microsoft.com/en-us/microsoft-365/blog/2025/12/04/advancing-microsoft-365-new-capabilities-and-pricing-update/
Updated pricing
So far, Microsoft has only released the USD prices and no UK-specific pricing. The Following list price changes will go into effect on 1st July 2026.
Source:
Source Microsoft https://www.microsoft.com/en-us/microsoft-365/blog/2025/12/04/advancing-microsoft-365-new-capabilities-and-pricing-update/
UK pricing: UK customers should expect the same percentage increases. Microsoft has a “pricing hamonisation” policy. This policy means Microsoft reviews foreign exchange rates twice a year (Typically February and August/September) to reaglin with the USD.
Even if the GBP remains strong we will still see the prices increase. If the pound weakens Mid 2026 we could see a further rise in September. If the pound strengths we could see the price drop.
| Microsoft 365 Suite | Current Price | July 2026 Price | Increase (%) |
|---|---|---|---|
| Business Basic | $6 | $7 | 16.70% |
| Business Standard | $12.50 | $14 | 12.00% |
| Business Premium | $22 | $22 | 0% |
| Office 365 E1 | $10 | $10 | 0% |
| Office 365 E3 | $23 | $26 | 13.00% |
| Microsoft 365 E3 | $36 | $39 | 8.30% |
| Microsoft 365 E5 | $57 | $60 | 5.30% |
| Microsoft 365 F1 | $2.25 | $3 | 33.30% |
| Microsoft 365 F3 | $8 | $10 | 25.00% |
Charity and Not for Profit
On 1st of July 2025 started retiring the 10 Free Microsoft 365 Business Premium licenses. Existing customers retained their licenses until their next renewal dates.
Microsft have shifting it’s “free” focus towards cloud-only solutions.
- The New “Free” Offer: Up to 300 free licenses of Microsoft 365 Business Basic. This includes web and mobile versions of apps (Word, Excel) and Teams, but it does not include the desktop-installed apps or the advanced security/device management (Intune) found in Business Premium.
- Discounted Premium: You can still get Business Premium, but it will no longer be free. Eligible charities will receive a 75% discount, making the cost roughly $5.50 (or ~£4.20) per user per month.
So, if you are a charity and keeping costs as low as possible you no longer enjoy free office licences but can get cheap, or you can remove the desktop versions of Office and work purely in the browser using the web version of Word, Excel, Outlook and teams.
What should our customers do?
- Contact the helpdesk and ask for a licence report, and remove any staff who are not needed. Identify unused and redundant licences.
- If you have any Exchange plan 2 used as a bolt-on to increase your mailbox size, then ask for these to be removed in July.
- Consider Annual pricing, buying your licenses upfront for the year will lock you in to pre-July pricing for 12 months. It will reduce your flexibility to reduce your licence counts and change your cash flow.
