Microsoft raised prices for its Personal and Family subscriptions as the company embeds its AI assistant, Copilot, into the core apps.
The increase applies to both new and renewing subscriptions. You now pay more to get Word, Excel, PowerPoint, Outlook, and other apps with built-in Copilot AI features.
Existing subscribers keep access to Copilot when their plan renews at the new rate. They can choose a Classic plan without AI at the prior price, but that option is limited in some regions and may end soon.
New subscription prices and features
| Plan | Monthly Price | Annual Price | AI / Copilot Included |
|---|---|---|---|
| Personal | $9.99 | $99.99 | Yes |
| Family | $12.99 | $129.99 | Yes (owner only) |
| Premium | $19.99 | $199.99 | Yes, with higher Copilot usage |
What’s included in these plans
- Personal covers one user with up to five devices.
- Family covers 1 to 6 users. Copilot AI features stay available only to the subscription owner.
- Premium adds higher usage limits for Copilot and advanced AI features.
All plans include Office apps, cloud storage, security features, and regular updates.
Why the prices went up
Microsoft expanded Copilot’s presence in its apps, moving it from an optional add-on to a feature bundled with Microsoft 365. Copilot provides AI-assisted writing, summarising, data insights, and task automation in Word, Excel, PowerPoint, Outlook, and other tools.
This change raises the overall value of the subscription. Users no longer need a separate Copilot plan for AI in the core apps. Bundling simplified offers but increased costs compared with older pricing.
Existing vs new subscribers
Existing Microsoft 365 customers see the price change when their subscription renews at the new rate. Microsoft offers a way to retain older pricing through Classic plans if you switch before renewal.
New customers must pay the updated price and cannot choose Classic plans. These older plans did not include Copilot, so they were cheaper. Microsoft set the Classic options to let long-time subscribers avoid cost increases if they want to keep older features without AI.
Controversy and regulatory pushback
Microsoft faced criticism and legal challenges in some countries over how it communicated the price changes. Regulators in Australia sued the company, saying it did not clearly disclose that a non-AI, lower-cost version was still available but hidden in the cancellation process.
The company apologised and offered refunds to customers who want to revert to cheaper plans. The criticism focuses on transparency in how Microsoft directs users to the new AI-enabled options.
How to switch to Classic or avoid Copilot costs
If you already subscribe to Microsoft 365 Personal or Family:
- Go to your Microsoft account.
- Cancel the upcoming renewal before it completes.
- During the cancellation process, choose the Classic plan (if available) to keep the older price.
Classic plans do not include Copilot or some newer AI features. They retain the older subscription price.
These steps differ by region. Some markets may limit the Classic option after a certain date.
Features changed by the price increase
AI with Microsoft 365 apps
- Built-in Copilot gives writing help in Word.
- Copilot summarises emails and threads in Outlook.
- Copilot suggests formulas and insights in Excel.
- It helps design slides and visuals in PowerPoint.
Storage and devices
- Personal: 1 TB cloud storage.
- Family: Up to 6 TB cloud storage (1 TB per person).
Comparison: Classic vs AI-Enabled plans
| Feature | Classic Plans | New AI Plans |
|---|---|---|
| Copilot AI | No | Yes |
| Price | Lower | Higher |
| Security and updates | Yes | Yes |
| Cloud storage | Same | Same |
FAQs
What exactly changed in pricing?
Microsoft raised prices because Copilot AI is now part of Microsoft 365 Personal and Family subscriptions.
Can I keep the old price?
Yes, current subscribers can switch to Classic plans during the renewal process and keep older pricing where available.
Will new customers see Classic options?
No. New customers must subscribe to the AI-enabled plans at the new price.
Does Copilot work for all family members?
Only the subscription owner gets access to Copilot AI features in the Family plan.
Are there limits to Copilot use?
Yes. AI usage limits exist and vary by plan. Premium offers higher limits.
Is there a refund if I already paid more?
In some regions, like Australia, Microsoft offered refunds if you switch back to Classic plans. Legal cases are ongoing.
What to do next
Check your Microsoft account and renewal date. Review whether you want the Copilot features at the new price or prefer Classic plans. Look at alternatives if you do not need AI. Compare your needs against prices to decide whether to renew, downgrade, or switch plans.
If you rely on Microsoft 365 for work or school, plan ahead for the cost change and update your budget to reflect the new subscription rates.
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