Microsoft 365 Price Rises: The Full History (and What’s Next)

Every Microsoft 365 price change, in order

Every figure below comes from Microsoft’s own announcements or its current UK store pages. Where a change applied only to business customers, or only to the UK, the table says so.

Consumer prices are UK retail, including VAT. Business figures from 2022 and 2026 are Microsoft’s published US list prices per user per month, because Microsoft does not publish a comparable sterling list. UK consumer prices checked on Microsoft’s own store, 9 September 2026.

Read down that table and the shape is hard to miss. Eleven years in which the consumer price did not move once, and then four changes in the twenty months since January 2025. The subscription did not slowly become expensive. It stayed still, and then it moved in steps — each one chosen by Microsoft, on a date Microsoft set.

Twelve years of nothing, then everything at once

The flat period was real, and it is worth being precise about how real. When Microsoft rebranded the consumer plans on 21 April 2020 — Office 365 Personal becoming Microsoft 365 Personal, Office 365 Home becoming Family — it added features and kept the prices exactly where they had been. That is unusual enough to be worth noting: a rename is the easiest moment in the world to slip a price rise through, and Microsoft did not take it.

Which makes Microsoft’s own wording in January 2025 the most quotable line in this whole history. Announcing the change, it said it was “increasing the prices of Microsoft 365 Personal and Family in the US for the first time since its release by $3 USD per month”. In the UK that meant Personal going from £5.99 to £8.49 a month, or £59.99 to £84.99 a year, and Family from £7.99 to £10.49 a month, or £79.99 to £104.99. An extra £25 a year on each. On the annual prices that is a rise of roughly 42% for Personal and 31% for Family, in a single step.

What ended the flat period matters as much as the amount. The increase did not arrive on its own, and it was not presented as an increase. It arrived inside an announcement about Copilot: the same message that added AI features and monthly AI credits to Personal and Family also raised what they cost. The sequence is the thing to notice. The product gained a capability, and then the bill gained £25 a year — and the subscriber was not asked which of those two they wanted.

The other consumer change in the table is the one nobody expected to go the other way. Microsoft 365 Basic, launched on 30 January 2023 at $1.99 a month, genuinely was a cheaper tier. It is also not an Office subscription: it buys storage, Outlook without ads and the web versions of the apps. If you need Word and Excel installed on your machine, Basic is not a route out of a price rise — it is a different product.

What happened on 1 July 2026

This is the most recent change, it landed ten weeks ago, and it is the one most UK businesses are only now meeting. Microsoft announced it on 4 December 2025 and called it “a global price and packaging update for select Microsoft 365 commercial suites and standalone components”. These are Microsoft’s own published list prices, per user per month.

Two things in that table are worth pulling out, because most coverage of this round skipped both.

Business Standard was not in the 2022 increase. Business Basic and Business Premium were; Standard was not. As far as Microsoft’s published list prices go, 1 July 2026 is the first time it has risen. So the small UK business that shrugged off 2022 and 2023 because it was on Standard has now been hit for the first time — which is exactly the reader who is puzzled by their renewal quote this autumn.

The largest rise landed on the cheapest plan. F1, the frontline-worker licence, rose 33% — the steepest increase in the round, on the plan bought for shop-floor, warehouse and shift staff. F3 rose 25%. Meanwhile Business Premium and Office 365 E1 did not move at all. Whatever the reasoning, the effect is that the gap between the cheap tiers and the expensive ones narrowed, which makes the cheap tiers less obviously the thrifty choice they used to be.

Microsoft’s stated reason for the round was that “organizations face an increasingly complex threat landscape, rising IT demands, and the urgent need for AI-powered transformation”, and the update did add capability — Defender for Office 365 Plan 1, extra Intune management features and Security Copilot agents folded into various tiers. Whether that is worth 12% to you is a judgement about your own business. It is worth knowing that it is the same mechanism as January 2025: capability goes into the tier, then the tier is repriced.

What Microsoft 365 costs in the UK today

Here is where the table above has landed, as at 9 September 2026, taken from Microsoft’s own UK pages.

Consumer prices include VAT. Business prices are per user per month on an annual commitment and exclude VAT, so add 20% to compare them with the consumer figures. Note that Microsoft’s UK business pages now list Standard and Premium in Copilot-bundled form.

Two numbers in that table do more work than the rest. Microsoft 365 Premium is £189.99 a year — Microsoft’s own top consumer tier now costs more in a single year than a perpetual Office licence costs outright. And Microsoft 365 Apps for business is £9.80 per user per month, which is £117.60 a year before VAT for the desktop apps and nothing else. That last one is the genuine like-for-like: it is the subscription stripped back to exactly what a one-time Office licence gives you, and it costs more in its first year than the licence costs forever.

For completeness, Microsoft still sells perpetual Office itself: Office Home 2024 at £119.99 and Office Home & Business 2024 at £249.99, both one-time, both for a single PC or Mac. The perpetual route is not a loophole — it is a product Microsoft lists on the same page as the subscriptions.

That is the whole argument in one picture, and it is not about which line is higher. It is about which line has a shape. One of them sat at the same number for eleven years, then stepped up, and will step again when Microsoft decides. The other is a single payment, made once, on a date the buyer picked.

If you want the arithmetic rather than the shape — what each option actually costs you over several years, and where the break-even falls for your own situation — we have worked that through separately in the cheapest way to buy Microsoft Office in the UK and, for households specifically, in Microsoft 365 Family against Office Home & Business 2024.

What’s next

Microsoft has announced no further price rise beyond 1 July 2026. Anyone telling you a date or a figure for the next one is guessing, and this page is not going to join them. But four things can be said from the record, and they are more useful than a prediction.

1. The July 2026 rise has not finished arriving

Because it applies at each customer’s next renewal, the increase is still working its way through UK businesses and will keep doing so across the rest of 2026 and into 2027. If you have not seen it yet, that is not a reprieve. It is a date in your calendar that you can go and look up.

2. The mechanism is packaging, not pricing

Microsoft’s own word for the 2026 round is “packaging”, and that is the honest description of how both recent rises worked. Capability is folded into a tier — Copilot into Personal and Family, Defender and Intune features into the business suites — and the tier is then repriced to match. It is a more durable pattern than a straightforward increase, because each round comes with something added, which makes it harder to describe as a price rise and harder to refuse. A subscriber who understands that mechanism can see the next one coming in the feature announcements, well before the invoice.

3. The cheaper routes are narrowing, not widening

Copilot Pro was withdrawn from sale and folded into a £189.99-a-year tier. The Classic plans exist but are unlisted and offered at Microsoft’s discretion. Business Premium held steady while Basic and Standard rose, compressing the ladder. Microsoft’s UK business pages now present Standard and Premium in Copilot-bundled form. None of that is a conspiracy — it is just the direction, and the direction has been consistent for twenty months.

4. What to watch is the announcement, not the rumour

Every rise in the table above was announced in advance: August 2021 for March 2022, January 2025 for renewals from that month, December 2025 for July 2026. Microsoft gives notice. So the useful habit is not to brace for an unknown increase — it is to read the Microsoft 365 announcements when new capability is added to your tier, because historically that is the signal that a price follows.

If it is just Word and Excel — and for a great many small businesses and households it genuinely is — then the rest of this page is the argument for buying them once. A perpetual Office 2024 licence is a single payment, activated for the life of the machine, supported by Microsoft until 2029. When Microsoft next reprices Microsoft 365, nothing happens to it.

If you are coming off a subscription rather than starting fresh, there is an order to doing it safely — buy and activate the replacement first, get your OneDrive files and Outlook mail down onto the machine, and only then cancel. We have set that out step by step in how to cancel Microsoft 365 and move to a perpetual licence. And if your needs are simpler still, some of the free alternatives are genuinely capable.

Frequently asked questions

The short version

A Microsoft 365 subscription has two prices: the one you are paying and the one you will be paying. Since January 2025 the gap between those has been real and it has only moved in one direction. A perpetual Office licence has one price, paid once, on a date you choose — and if you mainly need Word, Excel, PowerPoint and Outlook on one machine, that is the whole difference.

Office Professional Plus 2024 is a genuine Microsoft licence with lifetime activation, delivered by email, supported by Microsoft until 2029. And if your subscription is earning its keep — hosted email, Teams, storage for a whole household — then keeping it is the right answer, and knowing your renewal date is the useful thing to take from this page instead.