Microsoft 365 prices are changing in 2026, but the price rise itself is only part of the problem.
For many businesses, the bigger issue is renewing a Microsoft 365 setup that is already messy. Unused licences, old accounts, duplicate Teams licences, unnecessary add-ons, and users on the wrong plans can all become more expensive once new pricing applies.
That means your next renewal is not just an admin task. It is the point where you either clean things up or lock in higher costs for another term.
Microsoft has confirmed that its commercial Microsoft 365 pricing updates take effect from 1 July 2026. Existing customers remain on current pricing until their next renewal after that date.
Packaging updates also begin rolling out in 2026, with customers receiving at least 30 days’ notice in Message Center before changes become available in their tenant.
So before you accept your next Microsoft 365 renewal quote, it is worth asking a simple question:
“Are we paying for the right licences, for the right users, without creating unnecessary cost, security gaps, or support issues?”
That is the real value of reviewing Microsoft 365 before renewal.
What is changing with Microsoft 365 pricing in 2026?
Microsoft announced a global pricing and packaging update for selected Microsoft 365 commercial suites and standalone components. This includes Microsoft 365 Business plans, Enterprise plans, Frontline plans, Microsoft 365 Apps, EMS, Windows, Entra, and other selected standalone components.
Standalone Microsoft Teams and Copilot SKUs are not included in this July 2026 pricing update.
For SMEs, the most relevant changes are usually around:
- Microsoft 365 Business Basic
- Microsoft 365 Business Standard
- Microsoft 365 Apps for Business
- Teams included vs no Teams versions
- Any add-ons or standalone licences layered on top
The key date is 1 July 2026, but your actual impact depends on your renewal date. If your annual Microsoft 365 subscription renews after 1 July 2026, that is when the new pricing is expected to apply.
If your renewal is before that date, you may remain on current pricing until the next renewal cycle.
Microsoft 365 Business price changes from July 2026
The table below gives an approximate view of the Microsoft 365 Business price changes.
Microsoft has published USD list prices for the July 2026 update, but official UK pricing has not yet been released.
The GBP figures below are indicative only and have been converted using an exchange rate of 1 USD = £0.7433. They are included to help UK businesses understand the likely scale of the increase.
Please note: these figures are based on purchasing Microsoft 365 Business licences on an annual upfront payment basis, not on paying monthly. Monthly billing options may differ.
Microsoft 365 plan | Current monthly price | New monthly price from July 2026 | Increase per user/month | % increase |
Microsoft 365 Business Basic, with Teams | $6.00 / £4.46 | $7.00 / £5.20 | $1.00 / £0.74 | 16.7% |
Microsoft 365 Business Standard, with Teams | $12.50 / £9.29 | $14.00 / £10.41 | $1.50 / £1.12 | 12.0% |
Microsoft 365 Business Premium, with Teams | $22.00 / £16.35 | $22.00 / £16.35 | $0.00 / £0.00 | No increase listed |
Microsoft 365 Business Basic, no Teams | $4.40 / £3.27 | $5.40 / £4.01 | $1.00 / £0.74 | 22.7% |
Microsoft 365 Business Standard, no Teams | $9.29 / £6.91 | $10.79 / £8.02 | $1.50 / £1.11 | 16.1% |
Microsoft 365 Business Premium, no Teams | $18.79 / £13.97 | $18.79 / £13.97 | $0.00 / £0.00 | No increase listed |
Microsoft 365 Apps for Business | $8.25 / £6.13 | $10.00 / £7.43 | $1.75 / £1.30 | 21.2% |
Your actual renewal quote may vary depending on Microsoft’s final UK pricing, exchange rates, your CSP invoice or licensing provider, billing terms, and any local market adjustments.
This is where the increase becomes easier to understand. On a single licence, the monthly change may look small. Across a full team, it can add up quickly.
For example, if you have 55 users on Microsoft 365 Business Standard with Teams, an indicative increase of around £1.11 per user per month would add approximately £61.05 per month, or £732.60 per year, to your renewal cost.
Why the price increase could cost more than expected
The price rise is only part of the cost. The bigger issue is what you are already paying for when your renewal comes around.
Many businesses have Microsoft 365 licences that have grown over time without a clean review. Someone joins and gets the same licence as everyone else. Someone leaves, but their licence stays assigned while the mailbox is “sorted later”. A project requires an add-on, but nobody removes it when the project ends. A few users move between plans, then Teams or other standalone licences remain attached in the background.
Everything still works, so nobody notices.
The problem appears at renewal.
If your Microsoft 365 setup includes unused licences, old accounts, duplicate Teams licences, unnecessary add-ons, or users on plans they no longer need, those costs may already be sitting in the background.
Once the new prices apply, the same messy setup can become more expensive to renew.
If you renew the same licence mix without reviewing it, you may be committing to another year of:
- licences assigned to leavers
- paid licences on mailboxes that could be free shared mailboxes
- inactive or duplicated accounts
- contractors on full plans they no longer need
- users on plans that do not match their role
- standalone Teams licences where Teams is already included
- add-ons that are no longer required
- security features being paid for but not configured
- annual terms that make it harder to reduce cost later
That is why the July 2026 change is not just a budgeting issue. It is a good point to check whether you are renewing the right licences for the right users.
Teams included vs Teams separate: why this needs checking
Teams licensing is one area where businesses can easily get confused.
Microsoft 365 Business plans can exist in versions that include Teams and versions that do not. Microsoft’s July 2026 price update also confirms that standalone Microsoft Teams SKUs are not included in this specific update.
That does not mean Teams can be ignored.
It means you need to check how Teams is currently being licensed in your tenant before renewal.
If a user has a Microsoft 365 plan that already includes Teams, they may not need a separate standalone Teams licence. If a user is on a no Teams version of a plan, then a standalone Teams licence may be needed if they use Teams for meetings, chat, and collaboration.
The risk is not always obvious because the user experience may look normal. People can still access Teams, meetings still happen, and nobody complains. But behind the scenes, the business may be paying for overlapping licences or comparing the wrong renewal options.
Before renewal, check:
- Which users are on Microsoft 365 plans with Teams included?
- Which users are on no Teams versions?
- Who has standalone Teams assigned?
- Are any users paying for Teams twice?
- Are you comparing “with Teams” and “no Teams” pricing correctly?
The practical rule is simple:
Do not assume Teams needs to be bought separately until you know whether the user’s Microsoft 365 plan already includes it.
What to fix before your Microsoft 365 renewal
A good Microsoft 365 renewal review should not start with “what is the cheapest plan?”
It should start with:
Who uses what, what do they actually need, and what would break if we changed it?
Here are the areas businesses should fix before renewal.
1. Remove licences from leavers and inactive users
This is usually the easiest place to find waste.
Check for:
- former employees
- disabled users
- dormant accounts
- temporary staff
- old contractor accounts
- duplicate accounts
- shared mailboxes that still have licences attached
- users who were kept active “just in case”
A licence assigned to someone who no longer needs it is already waste. After the price increase, it becomes more expensive waste.
The important point is that offboarding needs to be more than disabling access. A proper leaver process should handle mailbox access, file ownership, security, and licence recovery. If licence removal is not part of the process, the same waste comes back every time someone leaves.
2. Match licences to real job roles
Many businesses assign Microsoft 365 licences by habit.
Everyone gets Business Standard because that is what the company has always used. Or everyone gets Business Premium because it feels safer. Or users are downgraded to Basic because finance wants to offset the price rise.
None of those approaches is ideal.
A better approach is to map licences to roles.
For example:
- Some users may only need email, web apps, OneDrive, SharePoint, and Teams.
- Some users need desktop Office apps because they work heavily in Outlook, Excel, Word, and PowerPoint.
- Some users need stronger controls because they handle finance, HR, leadership, admin access, or sensitive information.
- Some users need device management or access controls to work securely across laptops and mobiles.
This does not mean every user needs the most expensive plan. It means every licence should have a reason.
A clean renewal should make it easy to explain why one role is on Basic, another is on Standard, and another may need Premium. If that logic is not clear, the renewal conversation becomes a price debate instead of a business decision.
3. Check add-ons and overlapping licences
Add-ons are one of the easiest things to forget.
A business may buy an add-on for a project, security requirement, migration, meeting feature, or small group of users. Months later, the original reason is gone, but the licence remains.
Before renewal, check:
- standalone Teams licences
- calling or meeting add-ons
- security add-ons
- compliance add-ons
- old trial licences
- duplicated services
- licences assigned to users who no longer need them
This is especially important because Microsoft is also introducing packaging updates during 2026. Microsoft says new capabilities will roll out in summer 2026, including additions across security, storage, Copilot Chat, and IT management areas depending on the plan. For Business Basic and Business Standard, Microsoft lists additions including extra email storage, URL time-of-click protection, Copilot Chat enhancements, and Copilot Chat Analytics. Business Premium is listed with extra email storage, Copilot Chat enhancements, and Copilot Chat Analytics.
That matters because a feature you once bought separately may later be covered differently in your Microsoft 365 package.
The point is not to remove every add-on. The point is to check whether each one still has a purpose.
4. Check whether security depends on the current licence
This is where businesses need to be careful.
A Microsoft 365 licence is not just a bundle of apps. In many environments, it can also support security, access, and device controls.
If you downgrade users just to reduce cost, you may affect:
- device management
- conditional access policies
- mobile access
- endpoint controls
- admin protection
- identity security
- data protection
- email security
- user access to desktop apps
The issue may not show up as “security has been weakened”. It may show up as:
- Outlook stops working as expected
- a user cannot access email on their phone
- SharePoint access behaves differently
- a laptop no longer meets policy
- IT has to reverse the change
- users raise tickets because their normal workflow has changed
That is why licence downgrades need to be checked against how the tenant is configured.
The right question is not:
Can we move this user to a cheaper plan?
The better question is:
Can we move this user to a cheaper plan without removing something they need to work securely?
5. Fix the process, not just the spreadsheet
A one-off licence cleanup can reduce cost, but it will not keep the estate clean for long.
Licence waste usually comes back because the process is weak.
For example:
- joiners are assigned whatever licence is easiest
- movers keep old licences after changing roles
- leavers are disabled but not fully cleaned up
- nobody owns licence reviews
- finance sees the renewal cost but not the technical dependencies
- IT sees the setup but not always the commercial impact
A clean renewal should leave the business with a process, not just a spreadsheet.
That means defining:
- which licence each role should normally receive
- who approves exceptions
- how leavers are closed down
- when licences are reclaimed
- how add-ons are reviewed
- how often licence usage is checked
- who owns the renewal conversation before the deadline
6. Review mailboxes that may not need paid licences
Not every mailbox needs to belong to a licensed user.
In many businesses, old user mailboxes are kept active because people still need access to historic emails, client conversations, or shared information. That is understandable, but it does not always mean the mailbox still needs a paid Microsoft 365 licence.
Before renewal, check for:
- former employee mailboxes
- team inboxes
- admin or operations mailboxes
- role-based mailboxes, such as accounts@, info@, or support@
- mailboxes kept for reference only
- mailboxes that could be converted to shared mailboxes
In some cases, these can be changed to shared mailboxes, which may remove the need for a paid licence while still allowing the right people to access the mailbox.
This is a small detail, but it is exactly the kind of licensing waste that gets missed during renewal. If several old or shared mailboxes are still carrying paid licences, the cost can quietly build up for another year.
The key is to review each mailbox properly before removing anything. You still need to make sure access, ownership, retention, and security are handled correctly.
That way, you reduce unnecessary licence spend without losing important email history or disrupting the people who still need access.
This fits neatly with the existing section because point 1 already mentions shared mailboxes with licences attached, and this new point expands it into a clearer standalone renewal check.
How Sereno helps clients prepare for Microsoft 365 renewals
At Sereno, we do not treat Microsoft 365 renewal as a simple price comparison.
As part of our managed IT support service, we look at Microsoft 365 licensing as part of the wider IT environment. The right decision depends on how people work, what devices they use, what security controls are in place, and how the business manages joiners, movers, and leavers.
Before recommending changes, we review:
- what licences are assigned today
- which users are active, inactive, or no longer with the business
- whether licences match real job roles
- whether Teams is included, separate, or duplicated
- whether add-ons are still needed
- whether planned downgrades could affect apps, access, security, or device control
- whether the renewal baseline is clear enough for finance to understand
This helps clients make cost-saving decisions safely.
It also means Microsoft 365 licensing does not become a once-a-year panic. It becomes part of a managed process, where licences are assigned correctly, leavers are cleaned up properly, and renewal planning starts before the quote lands.
That is where the real value sits.
Not just in knowing that Microsoft 365 prices are increasing, but in knowing what to fix before those higher prices are applied to your business.
Final takeaway
The Microsoft 365 price increase in 2026 is a useful trigger to review your setup, but it should not lead to rushed decisions.
If you renew without checking your licence estate, you may pay more for waste that was already there. If you downgrade too quickly, you may remove apps, access, or security controls your business relies on.
The best approach is to review before renewal.
Check what you have. Remove what you do not need. Understand which users need which plans. Confirm Teams and add-ons. Make sure security is not weakened by cost-saving changes.
Then renew from a clean baseline.
Need support before your Microsoft 365 renewal?
If your Microsoft 365 renewal is due after July 2026, it is worth reviewing your setup before you commit to another term.
For businesses without dedicated IT management, this can quickly become another thing to worry about: checking licences, understanding plan changes, reviewing Teams, spotting unused add-ons, and making sure cost-saving decisions do not create security or user issues.
That is where the right IT support partner makes a difference.
At Sereno, Microsoft 365 licensing is managed as part of the wider IT support we provide. We help clients keep licences aligned to real users, roles, devices, security controls, and renewal dates, so decisions are not left until the quote lands.
That means less last-minute admin, fewer surprises at renewal, and more confidence that Microsoft 365 is being managed properly throughout the year.
Speak to Sereno about managed IT support that keeps your Microsoft 365 environment organised, secure, and ready for renewal.
