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21 Jul 2025

Microsoft 365 prices have risen by up to £30 a year – here's how to beat them

Microsoft 365 prices are going up, but there’s a simple way to avoid paying more

Natalie TurnerContent writer

If you use Microsoft 365 for Word, Excel and other tools, your subscription may have gotten more expensive at the start of the year – by up to £30 per year.

This is because Microsoft has added AI-powered features like Copilot and Designer to its subscription plans, automatically raising costs for users with auto-renew enabled.

But don’t worry – there is a way you can avoid the price hike. Here’s everything you need to know.

Want to access files and create new documents without spending? See how to get Microsoft office for free

Microsoft 365 price rises explained

At the beginning of 2025, Microsoft raised the prices of its Personal and Family subscriptions by 42% and 31%, respectively. These new prices applied to renewals from 16 January 2025 onwards, and new subscribers are already paying the updated rates.

Here’s a breakdown of the changes:

Plan	Old price	New price	Price increase
Personal (one person)	£5.99 per month or £59.99 per year*	£8.49 per month or £84.99 per year**	£2.50 per month (£30 over a year) or £25 per year
Family (up to six people)	£7.99 per month or £79.99 per year*	£10.49 per month or £104.99 per year**	£2.50 per month (£30 over a year) or £25 per year

*Pricing correct as of November 2024.

**Pricing correct as of 18 July 2025. For more information, visit the Microsoft website.

Why the price hike?

Microsoft says these price increases are largely down to the inclusion of new AI features, including:

Copilot Designed to assist with tasks in Microsoft apps like Word and Excel, to help users write, summarise and analyse content more efficiently.
Designer A graphic design tool that suggests layouts and assists with creating images, integrated into PowerPoint and other apps.

How to save with Microsoft 365 Classic

If you are an existing subscriber and don't need Copilot and Microsoft Designer, you can revert back to a 'Classic' plan, which offers the same services for the old price, but without the new AI features. Microsoft will be offering this downgrade option for a while yet, but the company has indicated it may phase it out in mid-2026.

To switch:

Sign into your Microsoft account
Go to Subscriptions > Manage
Click 'Cancel Subscription'. You’ll then see an option to choose a Classic Personal or Classic Family plan.

Your plan will switch automatically or on your next billing date.

Need to know

To access the Classic plan, you will need to be on an annual subscription, rather than a monthly one. Microsoft is currently allowing annual subscribers to the Classic plan to remain on it long-term, as long as they maintain a recurring subscription. If you cancel your subscription however, you won’t have the option to switch back to the Classic version. If you're on a monthly plan, check if you can switch to an annual Classic plan by logging into your Microsoft account, then going to Change > Switch, and looking for the annual option.

What if my subscription has automatically renewed?

If your Microsoft 365 subscription has automatically renewed and you’ve paid the higher price, you can still take action:

Request a partial refund If you choose to downgrade, you can contact Microsoft’s support team to request a partial refund.

Full refund within 30 days If you'd prefer to cancel the subscription entirely, Microsoft allows a one-off refund of your most recent recurring billing charge if you cancel within 30 days of payment following a price change. Note this refund is limited to one time per Microsoft account, per subscription product.

You can check your renewal status on the Microsoft website:

Log into your Microsoft account
Go to Subscriptions > Manage
If you see an option to cancel, your auto-renewal is on.
If you see ‘Turn on recurring billing’ link, auto-renewal is off. This means the new AI software won’t be automatically added unless you choose to re-subscribe when your current plan ends.

If you are paying for a higher-priced plan, you can disable the AI features, but this won't reduce your subscription cost. Visit Microsoft's website for step-by-step instructions on turning off Copilot and Designer.

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More ways to save on Microsoft 365

See if you can get a discount through your workplace If your employer is signed up to the Workplace Discount Programme, you can get an annual 365 Personal plan for £59.49 per year (a saving of £25.50) or an annual Family plan for £73.49 (saving £31.50). Enter your work email address and, if you are eligible, Microsoft will notify you. You'll be able to use either of these plans with your personal accounts and devices.
Get online and mobile versions of Microsoft Office for free They might not have all the functions of the paid version, but you can get Microsoft Office for free if you use the online version – or discover some free alternatives.
Downgrade to a Basic plan You'll pay £1.99 per month (or £19.99 per year) for 100GB of storage.
Students and teachers can get some software for free If you have a valid school or university email, you may qualify for free access to the full Microsoft Office suite and 1TB of cloud storage. Check your eligibility on the Microsoft Education website.

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Originally published 20 February 2025; content checked and republished 21 July 2025