Microsoft 365 Price Increases 2026 – What UK Businesses Need to Know
Microsoft has announced significant pricing changes across its Microsoft 365 and Office 365 subscriptions, with the changes due to take effect from 1st July 2026.
For many businesses, Microsoft 365 has become the backbone of day-to-day operations. Microsoft provide us with email, collaboration, security, device management, and productivity tools - so any change in licensing costs therefore has a direct impact on IT budgets and operational planning.
However, whilst Microsoft has been communicating the upcoming increases for several months, there remains one significant challenge for UK businesses and IT providers alike: as we approach the implementation date, the final UK pricing for many subscriptions is still awaiting confirmation.
The Current Situation in the UK
Microsoft first announced the forthcoming pricing changes many months ago, giving organisations advance notice that increases were coming.
Whilst indicative information has been released globally listing percentage increases and USD pricing for “most core” products, UK customers and Microsoft partners are still awaiting confirmation of the final pound sterling pricing that will apply from 1st July 2026. This leaves many organisations in the difficult position of knowing that costs are increasing, but not yet having complete visibility of the exact financial impact on our businesses.
With less than a month remaining before the changes take effect, many businesses are understandably looking for clarity so they can budget appropriately and understand the effect on future renewals.
At Sunrise Technologies, we are monitoring Microsoft's announcements closely and will continue to communicate confirmed pricing information to our customers as soon as it becomes available.
So What Is Changing?
The increases affect a range of Microsoft 365 and Office 365 subscriptions, although the percentage increase varies depending on the licence type. Some of the commonly used plans are expected to see increases similar to:
| Licence | Indicative Increase |
|---|---|
| Microsoft 365 Business Basic | 16% |
| Microsoft 365 Business Standard | 12% |
| Microsoft 365 Business Premium | No Increase |
| Microsoft 365 E3 | 8% |
| Microsoft 365 E5 | 5% |
| Microsoft 365 F1 | 33% |
| Microsoft 365 F3 | 25% |
But as for the final UK pricing - we can only guess, and this may differ once Microsoft publishes the official sterling rates.
Why Is Microsoft Increasing Prices?
Microsoft states that the pricing changes reflect the significant investment made in the Microsoft 365 platform over recent years. They report that more than 1,100 new capabilities have been added since the last major pricing review (which was last year), including improvements in:
Security and threat protection
Device management
Collaboration tools
Compliance capabilities
AI-powered productivity features
Microsoft Copilot integration
Microsoft's position is that today's Microsoft 365 platform delivers considerably more value than it did when many of the existing subscription prices were originally established.
What Does This Mean for Your Business?
Whilst a percentage increase may appear relatively small on a per-user basis, the impact can become significant when multiplied across an organisation.
For example:
A 25-user business could see annual licensing costs increase by several hundred pounds.
A 100-user organisation could experience increases running into thousands of pounds per year.
Organisations with large numbers of frontline workers may see more substantial increases due to the larger changes to F1 and F3 licensing.
The actual impact will vary depending on your subscription mix and renewal dates.
Rising software costs are just one of many risks businesses need to consider when planning their technology strategy. Our Business Risk Assessment can help identify opportunities to improve security, reduce costs, and strengthen resilience.
Why Isn't Microsoft Increasing Business Premium?
One of the most interesting aspects of Microsoft's announcement is not which licences are increasing, but which one isn't.
Microsoft 365 Business Premium remains unchanged in price, despite being Microsoft's most comprehensive business licence for organisations with up to 300 users. Whilst Microsoft has not publicly stated the reason, the decision appears to align with Microsoft's wider strategy of encouraging organisations to adopt a more security-focused licensing model as Business Premium includes capabilities such as:
Microsoft Defender for Business
Microsoft Intune
Conditional Access
Device Compliance Policies
Mobile Device Management
Advanced Identity Protection
Enhanced Security and Compliance Controls
Many organisations continue to operate on Microsoft 365 Business Standard and then purchase additional third-party security solutions to fill functionality gaps.
By maintaining Business Premium pricing whilst increasing the cost of lower-tier subscriptions, Microsoft effectively narrows the price gap between the plans and makes upgrading easier to justify.
From Microsoft's perspective, this helps drive adoption of a platform that delivers stronger security controls, improved device management and greater use of Microsoft's integrated security ecosystem.
For businesses, it creates an opportunity to evaluate whether they are receiving maximum value from their current licensing investment.
The Business Premium Value Debate
One reason many organisations remain on Microsoft 365 Business Basic or Business Standard is that they view Business Premium as an optional upgrade rather than a business necessity.
If your primary requirements are seen as just email, Microsoft Teams, Office applications and file storage, it can be difficult to immediately see the value of paying more for Business Premium. Historically, many businesses have chosen the lower-cost licence and only considered additional security measures when a specific risk or compliance requirement emerged.
However, the threat landscape has changed significantly in recent years. Cyber criminals are increasingly targeting small and medium-sized businesses through phishing attacks, ransomware, account compromise and credential theft. As a result, security is no longer simply an IT concern – it has become a business risk concern. When viewed purely as a productivity licence, Business Premium may appear to be an unnecessary additional cost, however, when viewed as a platform that combines productivity, security, device management and identity protection, the conversation becomes very different.
For many organisations, the relatively small increase in monthly licensing costs can provide access to security controls that would otherwise require multiple third-party products, additional management overhead and potentially far greater expense following a cyber incident.
As Microsoft continues to invest in security-first technologies, and as cyber insurance, compliance frameworks, and customer expectations become more demanding and expected, the argument for Business Premium is becoming increasingly difficult to ignore.
As cyber threats continue to evolve, many organisations are reviewing their wider cyber security strategy to ensure they have appropriate protections in place.
Why Sunrise Recommends Business Premium
At Sunrise Technologies, Microsoft 365 Business Premium forms the foundation of our recommended modern workplace and cybersecurity strategy. The advanced security capabilities included within Business Premium align closely with today's cybersecurity challenges and provide the foundation for:
Conditional Access and Zero Trust security
Managed endpoint security
Device compliance monitoring
Cyber Essentials and Cyber Essentials Plus readiness
Cyber insurance requirements
Secure remote and hybrid working
Many businesses are surprised to discover how much functionality is already included within Business Premium once it is properly configured and managed.
As the pricing gap between Business Standard and Business Premium continues to narrow, the business case for adopting Business Premium becomes increasingly compelling.
Many of the security controls available within Business Premium support organisations working towards Cyber Essentials certification and stronger security governance.
An Opportunity to Review Licensing
Every Microsoft price increase presents an opportunity to review your licensing strategy.
Over time, organisations often accumulate:
Unused licences
Former employee accounts
Users assigned to licences with features they do not need
Duplicate functionality across multiple vendors
A structured licensing review can frequently identify savings that offset part, or even all, of a pricing increase.
In some cases, moving to a more appropriate licence tier can actually improve security and productivity whilst reducing overall costs.
Of course, if you're following a robust IT and cybersecurity strategy, your Microsoft licensing is already reviewed regularly...right?!
In reality, many organisations only revisit their licensing when Microsoft announces a price increase, a renewal arrives, or somebody asks why the monthly bill has gone up. The good news is you're not alone. We regularly discover unused licences, duplicated functionality and security features that businesses are already paying for but never realised they had.
How Sunrise Technologies Can Help
As a Microsoft partner and managed services provider, Sunrise Technologies is already helping customers understand the potential impact of the pricing changes from 1st July 2026. Our licensing reviews help organisations:
Understand upcoming cost changes
Remove unnecessary licences
Ensure users have the correct subscriptions
Improve security posture
Maximise return on Microsoft investments
Prepare for future Microsoft roadmap changes
As soon as Microsoft confirms the final UK pricing structure, we will be contacting affected customers directly with specific information relevant to their environment.
Whilst Microsoft's pricing changes are attracting plenty of attention, it's worth remembering that they are not alone. Across the technology industry, software vendors are investing heavily in new capabilities, particularly around artificial intelligence, cybersecurity, automation, compliance and cloud services. Those investments inevitably come at a cost, and we're seeing many providers adjust their pricing models to reflect the additional functionality being delivered.
The difference is that Microsoft tends to attract the headlines because so many businesses rely on Microsoft 365 every day. Similar increases from backup providers, cybersecurity vendors, business applications and cloud platforms often happen with far less visibility.
But that doesn't necessarily mean the increases are unjustified. In many cases, organisations are receiving significantly more functionality, security and value than they were just a few years ago. The challenge for businesses is ensuring they are actually making use of those capabilities and receiving a return on their investment.
As for Microsoft, as soon as we have confirmation of the final UK pricing, Sunrise Technologies will be communicating directly with affected customers. In the meantime, this provides an excellent opportunity to review whether your current Microsoft investment is supporting your wider business goals.
After all, the organisations that gain the most value from technology are rarely those that spend the least. They're the ones that use technology effectively to improve productivity, manage risk and support growth…
References: Microsoft 365 Pricing and Packaging Updates (Official Microsoft Announcement)
Is Your Microsoft 365 Licensing Still Right for Your Business?
Microsoft's upcoming price changes provide the perfect opportunity to review your current licensing strategy.
Many organisations discover they are paying for licences they no longer need, missing out on security features they already own, or using subscriptions that no longer align with their business requirements.
At Sunrise Technologies, we help businesses across Essex and London maximise the value of their Microsoft investment through comprehensive licensing reviews, security assessments, and strategic technology planning.