Microsoft 365 Price Increase 2026: How to Pay Less

Microsoft raised the price of its 365 business plans on 1 July 2026. The increase applies to new and renewing customers, so most UK businesses will feel it at their next renewal. The good news: a price rise is also the best possible prompt to check you're not overpaying — and most businesses are. 

What's actually changed?

On 1 July 2026, Microsoft increased the list price of its commercial Microsoft 365 suites. It applies to both new and renewing customers, which means the change shows up whenever your current agreement comes up for renewal — not all at once.

Microsoft has tied the increase to extra security and management capabilities now built into the suites. But for most businesses, the headline is simpler: the same plan now costs more.

Why has Microsoft put the price up?

 The short version: Microsoft has folded additional security and management features into its commercial suites and repriced them to match. Whether or not your team uses those additions, the new pricing applies across the board. 

How much more will you actually pay?

That depends on your plan and how many licences you hold — your renewal quote will reflect the new pricing.

But "how much more" is the wrong question to lead with. The more useful one is: are we even using what we already pay for? For a lot of UK businesses, the answer is no — and that gap is where the real money is.

 

The part most businesses miss

For most companies, the invoice goes up and nothing else changes. That's the missed opportunity.

A renewal is the one moment you have every reason to look under the bonnet. And most setups have room to move:

• Licences still assigned to people who left months ago. You're paying for seats nobody sits in.
• Users on a bigger, pricier plan than their role needs. Not everyone needs the top tier.
• Security features you already pay for, switched off. MFA, Defender, data protection — often included, rarely fully enabled.
• Monthly billing where an annual commitment would cost less.

 Tidy these up and you often offset part of the increase — sometimes all of it. 

What to do before you renew

A quick checklist to run — or hand to whoever manages your IT:

1. Audit your licences. Match every seat to a real, current user.
2. Right-size the plans. Move people to the tier their role actually needs.
3. Switch on what you've paid for. Especially the security features — it's free protection you're already funding.
4. Review your billing term. Annual vs monthly can shift the total meaningfully.
5. Treat the renewal as a review, not a rubber stamp. This is the moment to question, not just re-sign.

Already with a provider? Here's the test

If you're an existing customer of ours, this is exactly the conversation we're already having at renewal — so you're covered.

If you're with someone else and the price increase is about to pass through with no phone call, no review, no "here's how we'll soften it"... that tells you something. A good IT partner treats a Microsoft price change as a reason to talk, not a bigger invoice to forward on.

Frequently asked questions

When did the Microsoft 365 price increase take effect? 1 July 2026. It applies to new and renewing commercial customers.

Does it affect existing customers? Yes — the new pricing applies at your next renewal, not immediately mid-term.

Can I avoid the price increase? You can't change Microsoft's list pricing. You can reduce your total spend by removing unused licences, moving users to the right plans, and reviewing your billing term. For many businesses that offsets a good chunk of the rise.

Should I switch to annual billing? Often it works out cheaper, but it locks you in for the term — so it's worth reviewing against how stable your headcount is before committing.

What is a Microsoft 365 licensing review? A short exercise where we check your licences, plans and settings against what your team actually uses — then show you where you can cut waste, tighten security, and get more from what you're paying for.

Don't just absorb the increase — get more for it

The businesses that come out of this ahead aren't the ones who pay the least. They're the ones who make sure every pound of their Microsoft 365 spend is doing something.

As a Microsoft Solutions Partner, The HBP Group helps UK businesses right-size their licensing, switch on the security they're already paying for, and stop funding seats nobody uses.

Book a Microsoft 365 licensing review — we'll show you exactly where your money's going, and where it doesn't need to.