The 1 July 2026 Microsoft 365 Price Rise Explained

The new prices do not hit everyone on the same day. There are two distinct groups:

1. New subscriptions placed on or after 1 July 2026 pay the new price from day one.
2. Existing subscriptions keep their current price until their first renewal after 1 July 2026, then renew at the new rate.

That second rule is the part most coverage skips. If your annual term renews in, say, March 2027, you will not feel the rise until March 2027. This staggers the increase across a rolling 12 month window, which is why we describe it as a renewal-shock wave rather than a single price-rise day. The practical question is not "has the price gone up" but "when does my renewal land, and what will it cost me then".

Today the gap between Business Standard (£9.60) and Business Premium (£16.90) is £7.30 per user per month. From 1 July 2026, with Standard at £10.80 and Premium unchanged at £16.90, that gap narrows to £6.10.

This is deliberate. By raising Standard while holding Premium flat, Microsoft makes the security tier look like better value and nudges buyers up the ladder. Premium adds Defender for Business, Intune device management and conditional access, the security layer most small firms lack. Microsoft is also introducing permanent Copilot bundle licences alongside the rise, steering attention toward Copilot Business as an add-on. None of that is wrong, but it is a sales strategy, and it pays to recognise it as one before you decide which plan you need.

Take Business Standard, the most common small-business plan. Here is the same licence at three prices, all per user per month and ex VAT:

• Dead Simple 365 annual upfront, fixed now: £8.83
• Microsoft direct today: £9.60
• Microsoft direct from 1 July 2026: £10.80

Fixing our annual rate of £8.83 before the rise lands sits about 18% below Microsoft's £10.80 July price. For a 10 seat team that is a difference of £19.70 per month, or roughly £236 per year, for the same licence. For 25 seats it is about £591 per year. The licence is identical Microsoft software in your own tenant. The only thing changing is the number on the invoice, and with us there is no teaser price that jumps at renewal.

Whichever way Microsoft moves, you have two honest routes to staying below RRP:

1. Start annual pricing before 30 June 2026. Buying an annual upfront term now fixes your rate for 12 months under Microsoft's subscription rules, so the 1 July rise cannot reach you until your next renewal a year later. Standard is £8.83 ex VAT.
2. Switch after the rise lands at your renewal. If your renewal is months away, there is no rush. When renewal shock arrives, move to us then. You will still sit below Microsoft's new list price, just without the year-long fixed rate.

Either way you stay under RRP. The difference is timing. If your renewal falls in the next few months, starting annual pricing now is the cleaner saving. If it is far off, note the date and switch when it suits you.

A few honest caveats. Annual upfront is paid in one payment and, under Microsoft's subscription rules, seats cannot be reduced mid-term (only within the first 7 days or at renewal). Seat additions and upgrades work any time. If you need month-to-month flexibility, our monthly flexible term costs about 20% more than annual and lets you resize or cancel at each monthly renewal.

Microsoft's list price is not the most expensive option on the table. Several UK incumbents already renew well above RRP, and the July rise gives them headroom to climb further. Current renewal rates, per user per month ex VAT:

• GoDaddy: renews around £15.99, in a provider-managed tenant.
• 123 Reg: £7.99 intro, renews around £13.99, provider-managed tenant.
• IONOS: £1 intro, renews around £13.50.

Against those numbers our annual Standard rate of £8.83 is roughly 45% below a GoDaddy renewal. If you are coming off an intro offer, the renewal jump from a reseller is usually larger than Microsoft's own rise. Check what your provider actually charges at renewal, not the headline intro price, before you compare.