Microsoft's auto-adding up to £30 a year to 365 subscriptions for its AI software – but we've a trick to avoid it

Microsoft 365 subscriptions will rise by up to £30 a year

Those with Microsoft 365's (formerly Office 365) 'Personal' and 'Family' plans will see prices rise by 42% and 31% respectively from their next billing date on or after 16 January 2025 (new subscribers also paid these increased prices from this date). See the table below for a full breakdown.

The increase is automatic if your plan is set to auto-renew. To check this, log in to your Microsoft account, go to 'Subscriptions' and select 'Manage'. If you see an option to 'Cancel', this means auto-renewal IS on.

If you don't see an option to cancel, but instead see a link that says 'Turn on recurring billing', then auto-renewal is NOT on. You won't be charged the new prices unless you turn auto-renew on or restart your subscription.

Prices are rising because AI software is being auto-added

The increase in subscription prices is to cover the cost of Artificial Intelligence (AI) features being auto-added to your plans. These include the Copilot app – a tool that can assist with various tasks, such as helping you to write in Word – and graphic design tool Microsoft Designer, which can help you to create images in PowerPoint, for example.

But some users are unhappy about the increases – as evidenced by these comments from our Forum users:

If your plan isn't set to auto-renew, the new AI software won't be auto-added unless you re-subscribe when your current plan ends.

Beat the price hikes by switching your plan to 'Classic'

This will revert your subscription to what it was before Copilot and Designer were added, but at the old price. So you'll still have access to Excel, OneNote, PowerPoint and Word, plus 1TB of cloud storage with a Personal plan or 6TB with a Family subscription.

Microsoft says the option to switch to a Classic plan will be offered for the next year. To make the switch:

1. Sign in to your Microsoft account.

2. Go to 'Subscriptions' and select 'Manage'.

3. Select 'Cancel subscription'. This will give you the option to choose a monthly or annual Classic Personal or Classic Family plan.

If your plan doesn't switch over automatically, it will do so on your next billing date. If you've already been charged the new price for Microsoft 365 and you downgrade your plan, you can request a partial refund by contacting Microsoft's support team.

Microsoft wouldn't, however, confirm whether you'll be able to stay on a Classic plan for longer than a year or whether you can switch from a monthly Classic plan to an annual Classic subscription, for example. If you're currently on the monthly plan, it's worth checking whether you can lock in for a year by logging in to your Microsoft account, selecting 'Change', then 'Switch' and looking for the annual option.

If you're moved onto the pricier new plans once your Classic membership expires, you can still turn off the AI functionality, though you won't see any cost savings – see Microsoft's website for instructions on how to disable CoPilot and turn off Designer.

Other ways to cut Microsoft subscription costs

In some cases, you may be able to save even more. For example:

• Check if you can get a 30% discount through your workplace. If your employer is signed up to Microsoft's 'Workplace Discount Programme', you can get the annual 365 Personal plan for £59.49 a year (saving £25.50 compared to the new price) or the annual Family plan for £73.49 (saving £31.50). You can then use the apps with your personal account on your own devices. To see if you qualify, simply enter your work email into this form on the Microsoft website.

• Look for a discounted subscription through a reputable third-party reseller. For example, Amazon currently sells a 15-month 365 Family plan (with AI) for £77.99 – this works out to £5.20 a month, saving you up to £79.36 compared to the new monthly Family plan price. The Amazon package comes bundled with McAfee anti-virus software but you don't have to use this if you don't want to.

• Get the online and mobile versions of Excel, OneNote, PowerPoint and Word for free with a Microsoft account. These versions lack some bells and whistles, but you could try them and see if they do the job for you. You also get 5GB of cloud storage for free.

• Only use Microsoft 365 for cloud storage? Downgrade to a Basic plan. This costs £1.99 a month or £19.99 a year and comes with 100GB of cloud storage, as well as the free online and mobile versions of Office. See the Microsoft website for the full info.

• If you're a student or teacher, you can access some Microsoft software for free. See our Free office software guide for full info.

You could also cancel and go elsewhere

If you're unhappy with the change and don't want to continue your subscription, you can:

• Cancel your plan. On your account, go to 'Subscriptions' and find your plan. Select 'Manage', 'Cancel subscription' and follow the instructions to proceed with cancellation. Be aware that any files you have saved on OneDrive may be deleted after six months of your subscription ending.
  
  - If you want to cancel ahead of your renewal date, you can do that and keep using the subscription until it ends. There won't be cancellation fees.
  
  - If you've already been charged the new price, you have a 30-day window following purchase to cancel and receive a refund. After that you can still cancel, but you won't get any money back (it'll just turn off auto-renewal).

• Download a free alternative. LibreOffice, OxygenOffice and FreeOffice are all Microsoft 365 alternatives that enable you to create documents, spreadsheets and presentations at no cost – see our Free office software guide for more alternatives.