Microsoft has confirmed pricing and packaging changes for select Microsoft 365 and Office 365 commercial plans, effective 1 July 2026. For UK businesses, this is a material licensing event because some commonly used plans are increasing, while other plans are holding flat and receiving additional features.
The key point for Finance Directors is that the impact is not the same across every plan. Microsoft 365 Business Basic and Business Standard are increasing, while Microsoft 365 Business Premium is not listed for a suite price increase in Microsoft’s published commercial pricing table. Enterprise, frontline and standalone products also have different percentage increases depending on the SKU. Microsoft’s published figures are in USD and state that pricing may vary by country and currency.
Finance Directors have a narrow window to review licensing before the 1 July 2026 pricing date. Existing customers remain on current pricing until renewal, so your renewal date matters.
This article sets out what is changing, which plans are affected, what the security implications are, and what a Finance Director should be reviewing with their IT team or managed IT support services London provider before the deadline passes.
What Is Changing on 1 July 2026
Microsoft has confirmed a global price and packaging update for select Microsoft 365 commercial suites and standalone components, including Enterprise, Business, Frontline and Government equivalents. The price changes take effect from 1 July 2026, while packaging updates begin rolling out from June 2026. Existing customers remain on current pricing until renewal.
These changes do not take effect mid-contract for existing committed subscriptions. If your annual subscription renews before 1 July 2026, your current pricing should continue for the new agreement term. If it renews on or after 1 July 2026, the new pricing is expected to apply at renewal. Monthly rolling subscriptions should be reviewed especially carefully because they give less price certainty than annual commitments.
The price increase applies regardless of whether your organisation fully uses the new features. That is the central issue for Finance Directors. The commercial question is not simply, “How much are prices rising?” It is, “Are we using the security, management and AI capabilities already included in our licensing, and are we on the right plan mix?”
Which Plans Are Affected And By How Much
Microsoft’s published commercial pricing update gives USD list prices from 1 July 2026. For business plans with Teams, Microsoft 365 Business Basic rises from $6.00 to $7.00 per user per month, a 16% increase. Microsoft 365 Business Standard rises from $12.50 to $14.00, a 12% increase. Microsoft 365 Business Premium remains listed at $22.00, with no percentage increase shown.
For business plans without Teams, Microsoft 365 Business Basic rises from $4.40 to $5.40, a 23% increase, and Microsoft 365 Business Standard rises from $9.29 to $10.79, a 16% increase. Microsoft 365 Business Premium without Teams remains listed at $18.79, with no increase shown.
For UK customers, the percentage movement may be reflected in local GBP pricing, but Microsoft’s official update notes that pricelist pricing may vary by country and currency. Current UK public list pricing for annual business subscriptions shows Microsoft 365 Business Basic at £4.60, Business Standard at £9.60 and Business Premium at £16.90 per user per month, excluding VAT.
A practical way to model the impact is to apply the published percentage increase to your current UK pricing, then confirm exact figures with your Microsoft partner or CSP before renewal. For example, a 20-user business on Microsoft 365 Business Standard at £9.60 per user per month would currently pay £2,304 per year before VAT. If a 12% increase applied to that price, the annual cost would rise to approximately £2,580.48, an increase of £276.48 per year before VAT.
Microsoft 365 Plan Price Changes: Summary Table
| Plan | Published Change From 1 July 2026 | Key Security And Management Position | Finance Director Takeaway |
|---|---|---|---|
| Microsoft 365 Business Basic with Teams | 16% increase in Microsoft’s USD list pricing | Basic cloud productivity, Exchange Online Protection and new URL time-of-click protection rolling out | Review for users who only need web apps, email and storage |
| Microsoft 365 Business Standard with Teams | 12% increase in Microsoft’s USD list pricing | Productivity apps plus added URL time-of-click protection and Copilot Chat enhancements | Review whether Standard users need stronger security or device management |
| Microsoft 365 Business Premium with Teams | No suite price increase shown in Microsoft’s USD table | Includes advanced cyberthreat protection and device management, including Defender for Business and management capabilities | Stronger value case if you need security and endpoint control |
| Office 365 E1 with Teams | No suite price increase shown in Microsoft’s USD table | Basic enterprise cloud services with URL time-of-click protection rolling out | Still limited compared with higher enterprise tiers |
| Microsoft 365 E3 with Teams | 8% increase in Microsoft’s USD list pricing | Microsoft Defender for Office Plan 1 and Intune capabilities rolling out | Review against add-ons and security consolidation opportunities |
| Microsoft 365 E5 with Teams | 5% increase in Microsoft’s USD list pricing | Broader enterprise security, compliance and analytics suite | Smaller relative increase, but still needs utilisation review |
| Microsoft 365 F1 with Teams | 33% increase in Microsoft’s USD list pricing | Frontline-focused functionality | Largest percentage increase in the with-Teams commercial table |
| Microsoft 365 F3 with Teams | 25% increase in Microsoft’s USD list pricing | Frontline-focused productivity and security capabilities | Review frontline usage and whether all users need F3 |
UK GBP pricing should be confirmed through your Microsoft partner, reseller or Microsoft admin centre because country, currency, agreement type, Teams inclusion and billing model can affect the final price.
The Business Premium Opportunity Finance Directors Should Not Overlook
The most strategically important pricing point for many SMEs is that Microsoft 365 Business Premium is not listed for a suite price increase in Microsoft’s published July 2026 commercial table. Business Basic and Business Standard increase, while Business Premium remains flat in the published USD pricing.
That changes the value calculation. With Business Standard increasing, the gap between Standard and Premium narrows proportionally. Business Premium continues to include the productivity apps and services in Business Standard, plus advanced cyberthreat protection and device management. Microsoft’s UK business pricing page describes Business Premium as including advanced cyberthreat protection and device management capabilities, including Microsoft Defender for Business.
For Finance Directors currently paying for Business Standard plus separate security, endpoint or device management add-ons, the arithmetic may now favour consolidating to Business Premium. The decision should not be made on licence price alone. It should be based on the total cost of Microsoft 365 licensing, endpoint management, antivirus or EDR tools, email protection, device control and administrative time.
Our post on why businesses should consider Microsoft Intune explains what Intune delivers and why it is a meaningful security capability for businesses managing staff devices.
Our post on what is an Office 365 assessment explains how a structured licence review identifies these consolidation opportunities, and our IT consulting team can run one for you ahead of your renewal date.
What New Features Are Being Added To Justify The Increases
Microsoft has framed the pricing update as part of a wider commercial packaging change. Microsoft says it is adding AI, security and management capabilities to Microsoft 365 offerings, with expanded features rolling out through summer 2026.
For commercial customers, Microsoft says new capabilities will begin rolling out in June 2026, with rollout of specified features due to complete by 1 August 2026. These include Microsoft Defender for Office 365 Plan 1, Intune Remote Help, Intune Advanced Analytics, Intune Plan 2, Intune Endpoint Privilege Management, Microsoft Cloud PKI and Intune Enterprise Application Management, depending on plan eligibility.
For business plans, Microsoft lists the following additions:
- Microsoft 365 Business Basic: +50GB email, URL time-of-click protection, Copilot Chat enhancements and Copilot Chat Analytics.
- Microsoft 365 Business Standard: +50GB email, URL time-of-click protection, Copilot Chat enhancements and Copilot Chat Analytics.
- Microsoft 365 Business Premium: +50GB email, Copilot Chat enhancements and Copilot Chat Analytics.
For Finance Directors, the relevant question is not whether these features exist. It is whether your organisation is configured to use them. Many businesses are already paying for licence tiers that include security and management capabilities that have never been enabled properly.
Our post on five benefits of using Office 365 covers the platform’s broader value proposition, and our post on top Microsoft 365 productivity tips is useful context for finance teams wanting to understand what staff should be getting from their subscriptions.
The Copilot Dimension
Copilot is now part of the Microsoft 365 value conversation, but it is important not to confuse Copilot Chat enhancements with the full paid Microsoft 365 Copilot product.
Microsoft’s current UK business plan information states that eligible business users signed in with a Microsoft Entra ID can use Microsoft 365 Copilot Chat with enterprise data protection. However, Microsoft also states that Copilot Chat does not integrate with Microsoft 365 apps or organisational content such as files, emails or chats. For deeper integration, businesses need Microsoft 365 Copilot as an add-on.
That distinction matters for budgeting. The July 2026 packaging update adds Copilot Chat enhancements and analytics to certain plans, but it does not mean every user automatically receives the full Microsoft 365 Copilot experience inside Word, Excel, PowerPoint, Outlook and Teams.
For Finance Directors, this means Copilot should be reviewed separately from the base Microsoft 365 licence decision. You may decide that only certain teams need the paid Copilot add-on, while others remain on Copilot Chat or no AI features at all.
Our posts on the advantages of Microsoft 365 Copilot, why businesses should embrace AI tools like Microsoft Copilot, 6 key features of Microsoft 365 Copilot Business, and is your business using Microsoft 365 Copilot yet cover what the platform’s AI capabilities deliver and how to evaluate whether they are worth investing in for your organisation.
What Finance Directors Should Do Before 30 June 2026
Identify Your Renewal Date Immediately
The single most time-sensitive action is knowing when your Microsoft 365 agreement renews. Existing customers remain on current pricing until renewal, so businesses with renewals before 1 July 2026 may be able to secure current pricing for the next agreement term.
If you are on monthly subscriptions, review whether that flexibility is still worth the premium and exposure to earlier pricing changes. If your user numbers are stable, an annual commitment may offer better cost certainty.
Commission A Licence Audit Before Renewing
Before renewing at any price point, ask your IT team or managed service provider to audit your current licence mix. A thorough audit should identify:
- Users on plans that are more expensive than their actual usage requires.
- Licences assigned to users who have left the organisation.
- Shared mailboxes or inactive accounts that do not need paid licences.
- Security add-ons that could be consolidated into a higher base plan.
- Staff who need stronger security because they handle finance, client data or administrative access.
- Users who need desktop apps and users who only need web access.
- Whether Business Premium would reduce your total cost when security tools are included.
Our post on the hidden costs of reactive IT is relevant reading for Finance Directors who have not previously treated licence optimisation as a regular activity. Our post on why businesses should consider an MSP for their IT needs explains how a managed service provider typically handles this as part of an ongoing relationship.
Evaluate The Business Standard To Business Premium Upgrade
Run the numbers for your specific user mix. Take your current Business Standard cost per user, add the cost of any separate security, device management, endpoint protection or email protection tools you are already paying for, and compare the total against Business Premium.
In some cases, particularly for businesses already paying for separate endpoint or device management tools, the upgrade may be cost-neutral or close to it while delivering a broader Microsoft security stack.
Our cloud backup company london service can help you model this comparison across your full licence estate.
Review Your Microsoft 365 Backup Provision
The pricing review is also an opportune moment to confirm your backup position. Microsoft provides platform resilience and retention tools, but that is not the same as a full independent backup strategy for Exchange, SharePoint, OneDrive and Teams data.
If you are renewing your M365 agreement without addressing backup, you may be increasing your licence spend without addressing one of the most significant risks in your cloud environment. Our posts on Microsoft 365 backup, cloud-to-cloud backup explained, and backing up your vital business data cover what a complete backup strategy should include. Working with a cloud backup company london ensures this is handled properly.
Factor In Device And Hardware Refresh
The Intune and device management capabilities included in Business Premium only deliver their full value when your devices are enrolled, managed and kept compliant. If your device fleet includes machines approaching end of life, running unsupported operating systems, or lacking proper endpoint controls, the timing of a licence upgrade may align well with a hardware refresh.
Our post on why your business should upgrade to Windows 11 is relevant here, and our hardware and software service can help you plan and procure the device refresh alongside your licence migration.
Plan Your Security Configuration Alongside The Licence Change
Moving to a higher licence tier only improves your security posture if the new capabilities are configured and enabled. Business Premium includes strong security and device management capability, but the settings still need to be planned properly.
Our post on why your business should become Cyber Essentials accredited covers how many of these features directly support Cyber Essentials controls, and our post on anti-phishing controls explains how Microsoft security tools can help reduce phishing risk.
Working with an anti phishing company new york or London-based provider to run phishing simulations after your licence upgrade can validate that your newly configured protections are working as intended.
Security Implications Of The July 2026 Changes
Beyond the licence cost question, the July 2026 changes carry meaningful security implications for Finance Directors who have responsibility for organisational risk.
Business Basic and Business Standard are receiving added URL time-of-click protection, which is useful for email and link-based threats. Business Premium already sits above those plans from a security perspective because it includes advanced cyberthreat protection and device management capabilities. Microsoft’s current business plan information states that Business Premium includes advanced cyberthreat protection and device management, while Business Basic and Standard focus more heavily on core productivity and cloud services.
This means businesses relying on Basic or Standard for staff who handle sensitive financial data, client information, payroll, payments or administrative access should review whether those licence levels provide adequate protection.
Our post on why EDR matters more than ever and our comparison of EDR vs antivirus vs XDR are useful reading for Finance Directors who want to understand what modern endpoint security requires beyond basic protection. Our post on endpoint security that pays off addresses the return on investment question directly.
A dark web monitoring company that monitors for your organisation’s credentials on underground forums is a valuable layer alongside your M365 security configuration, particularly during any licence transition period. Our post on dark web monitoring explained covers how this service works and what it detects.
Our post on password best practices covers the authentication baseline that should be in place regardless of your licence tier, and our post on why IT compliance matters covers the broader compliance obligations that a Finance Director’s licence decisions need to support.
For Businesses With International Operations
The July 2026 pricing changes are global, but the exact local currency impact can vary by market, agreement type, licence type, Teams inclusion, and reseller or CSP terms. Microsoft’s official pricing update is published in USD and notes that pricing may vary by country and currency.
For businesses operating across multiple countries with Microsoft 365 agreements in different currencies, the total cost impact needs separate modelling for each market.
A global it support company can model the cost impact across all your locations and coordinate licence renewals across multiple Microsoft tenants to ensure you are not leaving savings on the table by renewing at different times in different markets.
For businesses with European offices, a provider experienced in european it services will also understand the data residency and compliance implications of any licence tier change, particularly for organisations managing personal data under GDPR.
If your business is in the process of consolidating platforms or migrating workloads as part of a broader IT change, engaging a platform migration london provider before your renewal date ensures that the licence decision aligns with your planned technical environment rather than the one you are moving away from.
Our post on global IT support for hybrid workforces covers the Microsoft 365 management considerations specific to businesses where staff work across multiple locations and devices, which affects both the licence tier decision and the security configuration required.
Why A Managed IT Provider Is The Right Partner For This Review
For Finance Directors, the Microsoft 365 pricing review before July 2026 is primarily a financial decision with significant security implications. Navigating it well requires both commercial awareness and technical knowledge of what each licence tier actually delivers in practice.
A managed IT support services London provider that manages your Microsoft 365 environment on an ongoing basis is best placed to give you an informed view of which plan tier is right for your organisation, what capabilities you are currently underusing, and whether an early renewal makes financial sense given your renewal date and business trajectory.
Our posts on the benefits of outsourcing your IT to an MSP and our security services page explain how Northern Star approaches this kind of commercial and technical review as part of an ongoing managed service relationship. For Finance Directors who want a dedicated perspective on IT investment decisions, our Financial Director page explains how we work with finance leaders specifically.
Frequently Asked Questions
Can we renew early to lock in current pricing and how quickly do we need to act?
Existing customers remain on current pricing until renewal, so the key issue is your renewal date. If your agreement renews before 1 July 2026, you may be able to secure current pricing for the next commitment term. If your renewal is on or after 1 July 2026, the new pricing is expected to apply. You should speak to your Microsoft partner or managed IT provider now because licence audits, renewal changes and commitment decisions can take time to process.
Will Business Basic users automatically receive the new features that are being added?
Microsoft says packaging updates begin rolling out in June 2026 and that customers will receive at least 30 days’ notice in Message Center before changes become available in their tenant. Some features may still need administrator configuration, policy changes or user enablement before staff benefit from them.
Should we move all staff to Business Premium or only certain users?
A mixed licence strategy often makes more sense than moving everyone to the same tier. Staff who handle sensitive data, have elevated system access, work remotely, manage finance or approve payments may benefit most from the security and device management capabilities in Business Premium. Staff with simpler document and email needs may be well served by a lower tier. A licence audit will identify the right split for your organisation.
What happens if we do nothing before 1 July 2026?
Your pricing should remain unchanged until your next renewal, but once your subscription renews on or after 1 July 2026, the new pricing is expected to apply to affected plans. If you are on monthly subscriptions, you may see the impact sooner than a business on annual commitments. You may also miss the opportunity to optimise your plan mix before prices change.
Is the price increase the same for non-profit organisations?
Microsoft says nonprofit pricing will be adjusted in line with commercial pricing because it is tied to commercial rates through fixed percentage discounts. The nonprofit discount rate for impacted products is listed as 60% to 75%, and Microsoft notes that pricing may vary by country and currency.
Does Business Premium include full Microsoft 365 Copilot?
No. Business Premium includes strong security and device management capabilities, and Microsoft is adding Copilot Chat enhancements. The full Microsoft 365 Copilot experience remains a separate add-on for eligible plans. Microsoft’s current UK pricing page states that Microsoft 365 Copilot is available as an add-on and that deeper integration with productivity apps and organisational data requires that separate licence.
Act Before The 30 June 2026 Deadline
The Microsoft 365 pricing changes on 1 July 2026 are confirmed and will affect many UK businesses. The window to take action, through early renewal, licence optimisation, or a plan upgrade that improves your security posture while managing costs, is closing.
Northern Star provides managed IT support services London businesses depend on, including Microsoft 365 licence reviews, pre-renewal audits, Business Premium deployment and configuration, and ongoing M365 management that ensures you are always getting the security and productivity value your licences are designed to deliver.
Get in touch with our team today or call us on 0800 319 6032 to arrange a Microsoft 365 licence review before the July deadline. You can also visit our Why Us page to learn more about how we work with Finance Directors and business leaders to get the best value and strongest security from their Microsoft 365 investment.
