Microsoft 365 2026 Price Update: Key Info for UK Businesses | Part 1
Published by
James Naylor
on
From 1 July 2026, Microsoft 365 will see a significant pricing update. These adjustments reflect the added value of advanced AI features, enhanced security measures, expanded Intune management capabilities, and the integration of Microsoft Copilot. While the date may feel far off, understanding the impact now is essential. Waiting too long could result in unnecessary costs, underutilised tools, and missed opportunities to fully leverage the latest Microsoft 365 innovations.
Why This Matters
From 1 July 2026, Microsoft 365 will see a major price update. These changes are driven by significant enhancements: advanced AI features, enhanced security, expanded Intune device management, and the integration of Microsoft Copilot.
Even if the date seems distant, acting early is critical. Waiting too long may result in unnecessary costs, unused licences, or missed opportunities to leverage these new capabilities effectively.
Understanding SKUs: The Building Blocks of Microsoft 365
Every Microsoft 365 plan is packaged as a SKU (Stock Keeping Unit) - essentially a bundle that defines which apps, tools, and services are included. Common examples include Business Basic, Business Standard, Microsoft 365 E3/E5, and F1/F3 for Frontline Workers.
Each SKU comes with its own set of capabilities and pricing. Selecting the wrong combination across a team can quickly become expensive, while choosing wisely ensures your business gains access to the latest productivity tools, security features, and AI capabilities - without overspending.
Tip: Frontline Worker SKUs (F1 and F3) are set for the largest percentage price increases, so businesses with many frontline employees should review usage patterns carefully to avoid unnecessary costs.
Key Pricing Changes and Regional Considerations
| Plan / SKU | Current Price (USD) | New Price from 1 July 2026 (USD) | Notes |
|---|---|---|---|
| Business Basic | $6.00/user/month | $7.00/user/month | Includes Teams; largest impact on SMEs |
| Business Standard | $12.50/user/month | $14.00/user/month | Core productivity tools with enhanced security |
| Office 365 E3 | $23.00/user/month | $26.00/user/month | Includes advanced compliance features |
| Microsoft 365 E3 | $36.00/user/month | $40.00/user/month | Adds Intune, more AI capabilities |
| Microsoft 365 E5 | $57.00/user/month | $64.00/user/month | Full suite including Copilot and security enhancements |
| F1 (Frontline) | $4.00/user/month | $5.50/user/month | Largest % increase; careful review needed |
| F3 (Frontline) | $10.00/user/month | $13.00/user/month | Significant impact on organisations with many frontline workers |
Note:
Prices include Teams; packages without Teams increase proportionally.
Local market adjustments and currency conversions apply (e.g., GBP for UK businesses).
VAT must be considered in total cost calculations.
What Microsoft is Adding in 2026 (and How It Relates to Pricing)
Microsoft frames the 2026 price updates as a reflection of substantial enhancements across AI, security, and device management. Understanding these additions helps organisations evaluate the return on investment for each SKU.
Microsoft’s 2026 price updates reflect new capabilities across AI, security, and endpoint management. Here’s what’s changing:
| SKU / Suite | New Capabilities in 2026 | Key Takeaways |
|---|---|---|
| Business Basic | Expanded Teams features, basic AI-assisted productivity | Governance and usage tracking become important |
| Business Standard | Enhanced security policies, AI workflow automation | Opportunity to consolidate standalone security tools |
| Office 365 E3 | Advanced compliance & reporting, granular admin controls | Reduce redundancy in third-party tools |
| Microsoft 365 E3 | Intune device management enhancements, Copilot integration | Endpoint management may overlap existing add-ons |
| Microsoft 365 E5 | Full AI suite (Copilot), advanced security analytics, identity & threat protection | Security Copilot inclusion may influence E3 vs E5 decisions |
| F1 / F3 | Enhanced Teams, mobile-first productivity, AI-assisted task management |
Review frontline workflows and adoption plans
|
Key 2026 Updates Explained
1. AI Embedded in Daily Workflows: Copilot Chat Expands Across Microsoft 365 Apps
Copilot Chat will be available across Word, Excel, PowerPoint, Outlook, and OneNote, bringing AI directly into everyday work tasks. Admins gain new controls to monitor, secure, and measure usage, making AI governance a key consideration.
What to consider: AI features will reach more users by default, so governance, data boundaries, and usage tracking are critical. Organisations should plan beyond pilot projects.
2. Enhanced Security Across Core Suites
Microsoft is integrating additional security features into existing suites:
▪️Office 365 E3 and Microsoft 365 E3 now include Microsoft Defender for Office 365 Plan 1, protecting against phishing, malware, and malicious links.
▪️Office 365 E1, Business Basic, and Business Standard gain URL scanning to block known malicious websites.
What to consider: Businesses paying for standalone email protection or link-scanning tools should assess redundancy before renewal.
3. Advanced Endpoint Management: Intune Features Added to E3 and E5
Microsoft 365 E3 and E5 customers will see expanded Intune capabilities, including:
▪️Intune Remote Help
▪️Intune Advanced Analytics
▪️Intune Plan 2
For Microsoft 365 E5 specifically, additional features include:
▪️Intune Endpoint Privilege Management
▪️Enterprise Application Management
▪️Microsoft Cloud PKI
What to consider: Review current endpoint management and privilege setups, as some existing tools may become redundant once these capabilities are included in-suite.
4. Security Copilot Comes to E5
Security Copilot will be included for all Microsoft 365 E5 customers, with a 30-day advance notice before activation. This includes access to Security Compute Units (SCUs) and a monthly capacity scaling model to help teams manage workloads effectively.
What to consider: For security teams, the inclusion of Security Copilot may influence the E3 vs E5 decision. Focus on measurable workflows such as threat triage, investigation, and response to determine the real value.
Who Is Likely to Be Most Affected
Small and medium-sized enterprises using Business Basic or Standard licences.
▪️Organisations with Frontline Workers (F1/F3).
▪️Companies operating on monthly subscriptions.
▪️Organisations with unused or over-provisioned licences that could now increase costs.
Implications for Your Organisation
Without optimisation, licence costs will rise. But these updates also provide opportunities:
▪️Integrate AI tools like Copilot
▪️Strengthen security and compliance
▪️Reduce endpoint and licence sprawl
▪️Improve operational efficiency
Budget and Renewal Considerations
The updated prices create a clear cost baseline, but the bigger risk is paying more while keeping the same licence sprawl: unused licences, overlapping security tools, or inconsistent endpoint governance.
A strategic approach should include:
▪️Establishing a current-state licence and usage baseline
▪️Mapping personas to appropriate SKUs
▪️Identifying overlaps in security and endpoint tools
▪️Creating a Copilot readiness and governance plan
▪️Developing a renewal timeline aligned with your agreements
By proactively assessing licences and new features, your organisation can manage costs, improve efficiency, and take full advantage of Microsoft 365 enhancements in 2026.
Next Steps
In How to Prepare for Microsoft 365 Price Increases 2026 & Smart Upgrades |Part 2, we’ll explore practical strategies to prepare your organisation:
Optimising current licences
▪️Leveraging Business Premium features
▪️Integrating Copilot for maximum productivity
Staying informed now ensures your business navigates these changes smoothly, cost-effectively, and with full access to 2026 Microsoft 365 enhancements.
In summary, the Microsoft 365 price changes in 2026 reflect significant new capabilities - from AI-powered Copilot and enhanced security to expanded Intune management - offering real value but requiring careful licence planning. Organisations that act early can optimise spend, consolidate overlapping tools, and prepare teams for smarter workflows.
To make the most of these updates, review current licences, assess usage, and align renewal strategies now, or Book your Microsoft 365 Readiness Assessment and ensure your business is fully ready for the July 2026 changes.
or Go to Part 2 to learn step-by-step how to optimise licences, prepare for Copilot, and align renewals strategically
📩 Get in touch or email us at info@itbuilder.co.uk or message us on WhatsApp at +44 333 344 098 to chat directly with our team.
Protect your business, reduce stress, and stay one step ahead of AI-driven cyber threats!
Explore our related services:
▪️Cloud Technology ▪️Microsoft 365 ▪️Microsoft Azure▪️Cloud Telephony Solutions
James Naylor
James Naylor is ITbuilder's Managing Director and Founder. He has worked in technology since the early nineties and, after a decade in the corporate world, went into business himself.
James has lead ITbuilder for over two decades, building the business into the force that it is today, but is still a technician at heart and still very hands on with tech.
Despite growing up in Hertfordshire, James lived in the Netherlands for five years as well as London, before returning and setting up the base in Hertford, where he lives today.
More articles from James Naylor
