From today, 1 July 2026,
Microsoft 365 pricing increases take effect across all purchasing channels for UK customers
. If your business relies on Microsoft’s productivity suite, understanding these changes is essential for IT budgeting and planning over the coming months.
This pricing update affects both new customers immediately and existing subscribers at their next renewal date. For Kent and South East SMEs managing tight IT budgets, knowing which licences are affected—and which aren’t—can help you make informed decisions about your Microsoft 365 strategy.
Which Microsoft 365 Licences Are Increasing in Price?
Microsoft has confirmed pricing changes vary by product, with increases of up to 33% on certain licences
. The changes don’t apply uniformly across the entire Microsoft 365 portfolio.
Notably,
Microsoft 365 Business Premium and selected Office 365 licences are expected to remain unchanged
.
This appears to be a deliberate move by Microsoft to position Business Premium as the default secure licence for small and mid-sized organisations
, as it already includes comprehensive security and management features.
For businesses currently on other Microsoft 365 plans,
existing customers will see changes at their first renewal after 1 July 2026
. Those who renewed before 30 June retained current pricing for their full agreement term.
What’s Driving the Microsoft 365 Price Rise?
Microsoft hasn’t increased prices arbitrarily.
The company has positioned the increase as reflecting significant expansion of built-in capabilities across the platform, having delivered over 1,100 new features across Microsoft 365, security, Copilot, and SharePoint
.
The additions focus on three key areas:
- AI capabilities:
Copilot Chat brings secure AI assistance into Word, Excel, PowerPoint, Outlook, and OneNote - Security enhancements: Additional threat protection and identity management features to counter evolving cyber threats
- Endpoint resilience: Improved device management and recovery capabilities
For context, UK businesses are under increasing pressure from cyber threats. Our recent analysis of the UK Cyber Security Breaches Survey 2026 showed that revenue impact from breaches has doubled for SMEs, making built-in security features more valuable than ever.
Microsoft 365 Business Premium: The Standout Value Option
If you’re reviewing your Microsoft 365 licensing in light of these price changes, Business Premium deserves serious consideration. As the only mainstream business licence not increasing in price, it represents increasingly strong value.
Business Premium already includes:
- All Office applications across devices
- Exchange Online email hosting
- OneDrive cloud storage (1TB per user)
- Microsoft Teams collaboration
- Advanced threat protection and device management
- Information protection and compliance tools
For businesses concerned about vulnerability exploitation and the need to maintain robust security posture, these built-in protections offer considerable peace of mind without additional licensing costs.
Limited-Time Copilot Bundling Promotion
Microsoft is currently running a limited‑time promotional offer bundling Microsoft 365 Business Premium with Microsoft 365 Copilot for Business
.
The promotion is available for eligible organisations and is time‑limited
, making it worth investigating if you’re already considering AI-powered productivity tools.
Additionally,
starting 1 July 2026, Microsoft 365 Business Standard with Copilot and Microsoft 365 Business Premium with Copilot become permanent SKUs
, providing a predictable route to AI adoption for small and medium-sized businesses.
Practical Steps for UK SMEs
If you’re managing Microsoft 365 for your business, here’s what to do now:
1. Check Your Renewal Date
The new pricing will take effect at your next renewal date after 1 July 2026, whether you purchase licences directly from Microsoft or via a Cloud Solution Provider
. Understanding when your business will be affected helps with budget planning.
2. Review Your Current Licensing
Are you paying for features you don’t use? Or are you missing security capabilities that Business Premium would provide at the same or lower cost? Now is an ideal time to audit your Microsoft 365 deployment.
3. Consider Annual Subscriptions
Where appropriate, switching from monthly rolling licences to an annual subscription can provide cost benefits
, particularly for organisations with stable headcount.
4. Plan for Patching and Updates
Microsoft’s enhanced security features only provide value if your systems are properly maintained. Our guide to handling Microsoft’s record-breaking patch volumes can help ensure you’re getting full value from your investment.
Need Help with Microsoft 365 Planning?
Microsoft 365 licensing can be complex, and these price changes add another layer of consideration to your IT budgeting. Whether you’re wondering if Business Premium is right for your organisation, considering the shift to annual billing, or simply want to ensure you’re getting the best value from your Microsoft investment, Meridian Micro can help.
We support businesses throughout Kent and the South East with practical IT advice and managed services that take the complexity out of cloud licensing decisions. Call us on 01303 883111 to discuss your Microsoft 365 requirements, or get in touch via our contact page for a no-obligation conversation about your business IT needs.