If your business runs on Microsoft 365, there’s a date to put in the diary: 1 July 2026.

That’s when Microsoft’s new commercial pricing for Microsoft 365 suite subscriptions takes effect. The announcement landed on 4 December 2025, giving organisations roughly six months’ notice to plan, review their licensing, and decide how they want to handle the change at renewal.

For most London and Essex businesses, the increase is manageable. For some, it’s significant. And for all of them, it’s a useful prompt to look at whether the licences they’re paying for actually match how their teams work today.

Here’s what’s changing, what’s staying the same, and what the smartest next step looks like.

What Microsoft Has Announced

Microsoft is updating the list price on most of its Microsoft 365 commercial suites globally, with local market adjustments for each region. The changes apply to both new customers and renewing customers from 1 July 2026.

The increases vary by SKU. Most plans are rising between 5% and 33%, depending on the SKU:

• Microsoft 365 E3 is going up around 8.3%
• Microsoft 365 E5 is going up around 5.3%
• Frontline SKUs (F1 and F3) see the steepest percentage increases, in some cases up to 33%
• Microsoft 365 Business Premium is unchanged
• Office 365 E1 pricing remains unchanged for standard commercial plans
• Microsoft 365 Business Basic and Business Standard are also increasing, with UK pricing moving up by double-digit percentages in some cases.

For organisations running a mixed estate of suites, the average impact will depend on which plans dominate the licence count and whether large groups of frontline staff are involved.

New Capabilities Included in the Update

Microsoft has been clear that the update reflects new capabilities being added to the suites, alongside the price change, rather than being on top of an unchanged product.

Throughout 2026, the suites are gaining a series of upgrades that previously sat behind separate paid add-ons or were not available at all:

• Expanded Copilot Chat capabilities across Word, Excel, PowerPoint, Outlook and OneNote
• Microsoft Defender for Office 365 Plan 1, now included in Office 365 E3 and Microsoft 365 E3
• Additional Intune capabilities for E3 and E5, including Remote Help, Advanced Analytics, Intune Plan 2 and Privilege Management
• Microsoft Security Copilot capabilities for Microsoft 365 E5 customers
• More mailbox storage and improved phishing protection on Business plans

In its official licensing announcement, Microsoft confirmed it has delivered more than 1,100 new features across Microsoft 365, security, Copilot, and SharePoint over the past year.

Whether your team is actually using those features is a separate question, and a more useful one to ask before renewing.

What It Means for Existing Customers

The most important detail for current Microsoft 365 customers is that the new pricing does not switch on automatically on 1 July.

Existing commercial subscriptions stay on current pricing until their next renewal after that date. In practice, that means:

• A renewal in May 2026 will still be at current rates
• A renewal in October 2026 will move to the new rates
• A 12-month or multi-year renewal completed before 30 June 2026 locks in current pricing for the duration of the agreement

For businesses with a renewal anniversary falling shortly after July, the temptation is to bring the renewal forward and lock in current pricing. That’s a valid option, although it isn’t the only one, and it isn’t always the right one.

A Licence Review Should Come First

Renewing early can protect against the price rise. It can also lock a business into licences it no longer needs, plans that don’t match how teams actually work, and capacity for staff who have already left.

The cleanest way to approach the change is to use it as a prompt for a structured review of Microsoft licensing, ideally before any renewal decision is made. A good licence review will typically surface the following:

• Active licences assigned to leavers or dormant accounts
• Users on a higher tier than they need, or on a lower tier than their role requires
• Add-ons that duplicate features already included in the suite
• Opportunities to consolidate onto Business Premium or E3, where the bundled cyber security and management features now offset standalone tool costs
• Frontline roles paying for full Business Standard when an F1 or F3 plan would cover their actual usage

Most organisations find that the savings from cleaning up the licence estate offset a meaningful portion of the upcoming price rise before any decision on early renewal is even made.

Where NetPlatforms Fits In

NetPlatforms works with London and Essex businesses as a Microsoft partner and managed IT provider, with an ongoing remit to keep clients on the right licences at the right cost.

For the July 2026 change, the team is offering structured Microsoft 365 licence reviews to:

• Map a current licence mix against actual usage
• Identify wasted spend and underused features
• Model the cost of renewing at current rates against the new pricing
• Recommend any tier consolidations or upgrades that would deliver better value at renewal
• Time the renewal around your anniversary so you’re never paying a month longer than needed

The review is most useful when there’s still time to act on the findings before the renewal date, particularly for organisations whose anniversary falls between July and December 2026.

Get Ahead of the Change

The Microsoft 365 price rise is firmly on the calendar, but the cost impact on your business isn’t fixed yet. A short conversation now, before renewal, almost always leads to a better outcome than a rushed decision later.

Get in touch with us to book a Microsoft 365 licence review and find out exactly what the July 2026 changes mean for your business.

We’ll walk you through your current licences, your renewal timing, and the smartest way to handle the change at your next anniversary.

FAQs

1. When is the Microsoft 365 price increase happening?
   The Microsoft 365 price increase takes effect on 1 July 2026. Existing customers stay on current pricing until their first Microsoft 365 renewal after that date.
2. Which Microsoft 365 plans are affected by the Microsoft 365 pricing 2026 update?
   Most plans are rising between 5% and 33%. E3 goes up around 8.3%, E5 around 5.3%, and Frontline SKUs see the largest increase. Business Premium and Office 365 E1 are unchanged.
3. What’s included in the suite alongside the Microsoft licence price rise?
   The price update lands with new capabilities, including Copilot Chat enhancements, Microsoft Defender for Office 365 Plan 1 in E3, additional Intune features, Security Copilot in E5, and expanded mailbox storage on Business plans.
4. Should I renew early to avoid the Office 365 price increase?
   Renewing before 30 June 2026 locks in current pricing, but early renewal isn’t always the right call. A Microsoft 365 renewal review first will surface wasted spend and tier mismatches that often offset much of the rise.
5. How should UK businesses prepare for the Microsoft 365 price increase in July 2026?
   The best starting point is a structured Microsoft 365 licence review ahead of your renewal anniversary. NetPlatforms can run that review, model the cost impact, and recommend the right licences for the way your team works today.