Publish Date
14/05/2026
Categories
Blogs Hot Topic
Microsoft has announced pricing updates that will affect most commercial Microsoft 365 and Office 365 subscriptions from 1st July 2026. While the changes won’t impact organisations immediately, businesses should understand how the increases will apply and when they will start to affect their costs.
The important point is that these changes do not take effect mid-contract. Instead, the new pricing will only apply when your subscription renews on or after 1st July 2026, meaning existing agreements will continue at their current rate until their renewal date. However, organisations with monthly rolling subscriptions should pay particular attention, as these are reviewed every month and may see pricing adjustments sooner than annual commitments.
Understanding how these updates work will help you plan budgets, review licensing, and avoid unexpected increases when renewal time arrives.
Headline Percentage Increases (Applied at Renewal)**
| Plan | Percentage Increase |
|---|---|
| Microsoft 365 Business Basic | 16.7% |
| Microsoft 365 Business Standard | 12% |
| Microsoft 365 Business Premium | 0% |
| Microsoft 365 E3 | 8.3% |
| Microsoft 365 E5 | 5.3% |
| Microsoft 365 F1 (Frontline) | 33.3% |
| Microsoft 365 F3 (Frontline) | 25% |
*Official new UK prices to be confirmed by Microsoft
**For the full list, Microsoft has published a detailed breakdown of the changes (currently shown in USD, with UK pricing expected to be confirmed and aligned from 1st June) here.
Business Premium: No increase
Business Premium remains unchanged with a 0% increase.
With Business Standard rising by approximately 12%, the cost gap between Standard and Premium has narrowed. The step up from Standard to Premium becomes proportionally smaller, while Premium continues to include:
- Microsoft Intune device management
- Microsoft Defender for Business
- Conditional Access and advanced identity controls
- Enhanced endpoint security
Because of this, Premium now offers noticeably better value for many organisations.
What’s driving the increase?
Microsoft have implemented this price rise in response to their investment in AI capability, security resilience, and the underlying Microsoft 365 platform as a whole. The additional features included in each product is summarised in the Microsoft table below.
What businesses should consider…
- Check your renewal date before July 2026 to understand when the increase will apply or check with your Cobweb account manager.
- Review whether your users on Basic or Standard would derive greater value from Premium.
- Align licences to user roles rather than defaulting to a single plan across the organisation.
The increases are material, but because they only apply at renewal, organisations have time to plan. With Premium unchanged, the pricing shift meaningfully reshapes the comparison for many SMEs.