Microsoft 365 prices going up in 2026 with new Copilot licences launching

Microsoft 365 Copilot Bundles: What’s Changing in July 2026

From 1 July 2026, Microsoft will roll out new Microsoft 365 Copilot bundles as part of a global licensing overhaul, and yes, prices are going up.

Gone are the days when you could simply bolt on Copilot for £30/month. Instead, Copilot will come built-in to premium licences, including:

• Microsoft 365 Business Premium with Copilot
• Microsoft 365 E3 with Copilot
• Microsoft 365 E5 with Copilot

For most UK businesses using Microsoft 365, these changes mean both new features and higher costs. Whether you’re running a lean startup or a multi-department SME, it’s time to rethink your licensing strategy.

Why Microsoft Is Bundling Copilot With Microsoft 365

Microsoft’s move reflects its AI-first strategy. Rather than offering Copilot as an optional add-on, it’s being positioned as a core productivity tool.

This shift is designed to:

• Make it easier to buy and deploy AI features
• Streamline billing for enterprises
• Encourage broader adoption of Microsoft Copilot tools

It’s also a sign that Microsoft sees AI as the future of Office productivity, not just a luxury feature.

Which Microsoft 365 Plans Are Affected by Copilot Bundles?

The following Microsoft 365 plans will see bundled Copilot pricing and functionality:

• Business Premium
• Microsoft 365 E3
• Microsoft 365 E5

All of them will include built-in Copilot features by default. If your business is currently on any of these plans, you’ll want to review your usage and prepare for pricing updates.

New Copilot Features Included in Microsoft 365 Bundles

Each Copilot bundle brings powerful features directly into the tools you use every day:

• Copilot Chat in Word, Excel, PowerPoint, Outlook, and Teams
• Agent Mode for automated workflows and AI-driven task handling
• Enterprise-grade security controls
• Compliance support for regulated sectors

These aren’t just flashy AI toys. They’re serious tools for increasing productivity and reducing admin.

Benefits of Microsoft 365 Copilot Integration

Here’s what your team can expect:

• Generate polished emails and reports in Outlook and Word
• Automate spreadsheet formulas and data insights in Excel
• Summarise long Teams conversations or meeting recordings
• Draft presentations quickly in PowerPoint

With Copilot, your team can spend less time on grunt work and more on strategy.

Microsoft 365 Copilot Pricing Breakdown (2026)

While Microsoft hasn’t released official UK pricing yet, global leaks suggest:

Even with bundled savings, this is a significant price jump, especially for large teams.

Copilot Add-On vs. Bundled Plans: Which Offers Better Value?

Today’s model:

• £20/month base + £30 Copilot add-on = £50/user

2026 bundled model:

• All-in-one for around £40–£55/month

The bundled plans are clearly more cost-effective and reduce billing complexity.

How to Prepare for Microsoft 365 Price Increases

Don’t wait until July 2026. Here’s what smart businesses are doing now:

• Auditing unused licences
• Reviewing Copilot usage reports
• Budgeting for price increases
• Timing renewals to secure current pricing

Planning early means no surprises later.

Is Copilot Worth It for Small Teams and SMEs?

AI isn’t just for enterprise giants. Copilot’s automation features are especially useful for:

• Small HR or finance teams
• Marketing departments
• Operations managers

If your team uses Microsoft 365 daily, Copilot can save hours every week.

Trial Before You Buy: Testing Copilot Before 2026

Try Copilot as an add-on in 2025 before committing to a bundle:

• Run productivity comparisons
• Track adoption among staff
• Measure return on investment

Then, switch to a Copilot bundle in July 2026 if the benefits are clear.