Microsoft Copilot is the AI assistant built into Word, Excel, PowerPoint, Outlook, and Teams. For UK businesses already paying for Microsoft 365, it promises to change how your team works. It drafts documents, summarises email threads, generates presentations, and answers questions across your organisation’s data.
But at £16.10/user/month on top of your existing M365 subscription, Copilot is a significant investment. A 10-person team pays £3,318/year – more than double what the same team would pay for Google Workspace with Gemini bundled in. This guide covers what Copilot does, what it costs after the July 2026 price changes, and how it compares to Google Gemini. We also look at whether the UK government’s 20,000-person pilot proves it’s worth the money.
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- Microsoft Copilot costs £16.10/user/month as an add-on - on top of M365 Business Standard (£11.55/user/month from July 2026), bringing the total to £27.65/user/month or £3,318/year for 10 users
- The UK government’s 20,000-person pilot found 26 minutes saved per day - equating to 13 working days per year, with 83% of users reporting measurable time savings across 12 departments
- Google Gemini bundles AI into Workspace at £11.80/user/month - saving £1,902/year for a 10-person team compared to Microsoft 365 plus the Copilot add-on
- Teams and Outlook drive the strongest results at 71% and 60% adoption - while Excel (23%) and PowerPoint (24%) adoption was notably low in the government trial
- Start with 3-5 licences for admin-heavy roles before scaling - the government pilot showed 17% of users reported zero time savings, so evidence-based rollout avoids wasted spend
Microsoft Copilot Pricing UK (2026)
Copilot is not a standalone product. It requires a Microsoft 365 base subscription plus the Copilot add-on. Understanding the total cost – not just the add-on price – is essential for budgeting.
| Component | Monthly (Annual Billing) | Monthly Billing |
|---|---|---|
| M365 Business Basic | £5.75 (from July 2026) | £6.90 |
| M365 Business Standard | £11.55 (from July 2026) | £13.86 |
| M365 Business Premium | £18.10 | £21.72 |
| Copilot add-on | £16.10 | £19.32 |
All prices exclude VAT. M365 Business Basic and Standard are increasing in July 2026 (12–17% rise). Business Premium stays the same. Annual commitments signed before 30 June 2026 lock in current pricing until renewal.
Total Cost by Team Size
Based on M365 Business Standard + Copilot at £27.65/user/month (post-July 2026):
| Team Size | Monthly Cost | Annual Cost |
|---|---|---|
| 5 users | £138 | £1,659 |
| 10 users | £277 | £3,318 |
| 25 users | £691 | £8,295 |
| 50 users | £1,383 | £16,590 |
Microsoft is restructuring its licensing in late 2026, with Copilot expected to be bundled into higher-priced licence tiers rather than sold as a standalone add-on. Details have not been confirmed, but the direction is clear – AI will become a standard part of the M365 subscription at a higher base price.
What Copilot Does in Each App
Copilot is not one feature – it is a different AI assistant in every Microsoft app, each with different strengths and limitations.
| App | What Copilot Does | UK Gov Adoption |
|---|---|---|
| Teams | Meeting summaries, real-time transcript Q&A, 30-day chat history search | 71% (highest) |
| Outlook | Email thread summaries, draft replies, tone coaching, calendar reasoning | 60%+ |
| Word | Draft documents from prompts, rewrite sections, summarise, reference other files | 45% |
| PowerPoint | Generate decks from prompts or Word docs, add slides, formatting | 24% |
| Excel | Formula suggestions, chart recommendations, data insights | 23% (lowest) |
Key insight from the UK government pilot: Teams and Outlook are where Copilot delivers the most value. Excel and PowerPoint adoption was notably low – the AI struggles with complex spreadsheet logic and often produces vague suggestions rather than usable edits.
Additional Features
Beyond the core apps, Copilot includes three additional tools. Copilot Pages is a collaborative AI canvas for editing generated content with colleagues. Copilot Search lets you find information across all your M365 data using AI. Copilot Studio lets you build custom AI agents scoped to your organisation’s data. Studio’s basic agent-building is included with the Copilot licence. Advanced usage costs $200/month for 25,000 credits or $0.01/credit on a pay-as-you-go basis.
UK Government Pilot Results
The UK government ran the largest controlled Copilot trial to date. It covered 20,000 civil servants across 12 departments (including HMRC, DWP, Home Office, and Ministry of Justice) from September to December 2024. The results, published in 2025, provide the most reliable real-world data on Copilot’s actual impact.
| Metric | Result |
|---|---|
| Average time saved | 26 minutes per person per day |
| Annualised saving | 13 working days per year |
| Users reporting time savings | 83% |
| Document drafting saving | 24 minutes per document |
| Presentation creation saving | 19 minutes per presentation |
| Satisfaction score | 7.7/10 |
| Would recommend | 8.2/10 |
| Would not go back | 82% |
| Departments that continued | 9 of 12 |
The trial also found that middle-grade employees (HEO to Grade 6) benefited most, and users with dyslexia and dyspraxia reported particularly significant improvements. However, 17% of users reported no time savings at all, and adoption of Excel and PowerPoint features declined during the trial period.
Copilot vs Google Gemini for UK Businesses
The most important comparison for UK businesses is not Copilot against ChatGPT. It is Copilot against Google Gemini, because both are embedded in the productivity suites businesses already use.
| Factor | Microsoft Copilot | Google Gemini |
|---|---|---|
| Cost (10 users/year) | £3,318 | £1,416 |
| AI pricing model | Separate add-on (£16.10/user/mo) | Bundled in base plan |
| Desktop apps | Full (Word, Excel, PowerPoint) | Web apps primarily |
| Cross-app AI reasoning | Strong (Microsoft Graph) | Limited to Google ecosystem |
| Custom agent builder | Copilot Studio (powerful) | Gemini Extensions (basic) |
| Meeting AI | Mature (Teams) | Good (Meet) |
| UK data residency | Available (UK data centres) | Available (London region) |
| User satisfaction | 7.7/10 (UK gov trial) | 82% report value (Google data) |
Choose Copilot if: your business runs on Microsoft 365, you need desktop Office apps (Word, Excel, PowerPoint), you want Copilot Studio for custom agents, or your team relies heavily on Teams for meetings and communication.
Choose Gemini if: budget is a primary concern (£1,902/year cheaper for 10 users), your team works in Google Workspace (Gmail, Docs, Sheets, Drive), or you prefer AI bundled into your existing subscription.
For a broader comparison of AI platforms including ChatGPT and Claude, see our ChatGPT vs Claude vs Gemini comparison.
Data Privacy and GDPR
Microsoft’s data handling for Copilot is strong on paper. Customer data (prompts, responses, documents accessed via Microsoft Graph) is not used to train the underlying AI models. Data stays within Microsoft’s Azure infrastructure. UK data residency is available, meaning your data can be processed in UK data centres.
The main caveat: Anthropic models were added as a subprocessor in January 2026, and these are excluded from EU/UK Data Boundary and in-country processing commitments. If your data governance requirements are strict, confirm with Microsoft which models are used for your tenant. Copilot is also subject to your existing M365 permissions. It can surface any data a user has access to, which may include documents they should not routinely see.
You might also find our AI chatbot costs guide useful.
Is Microsoft Copilot Worth It?
For teams that live in Microsoft 365, the 26-minute daily saving demonstrated by the UK government trial represents genuine value. At £16.10/user/month, a user earning £30,000/year (roughly £15/hour) would need to save just over an hour per month to break even. The government pilot suggests savings of 8–9 hours per month – a strong return.
But not every user will see those savings. The government trial showed that 17% of users reported no benefit, and Excel/PowerPoint adoption was notably low. The smart approach is to start with 3–5 Copilot licences for your heaviest Microsoft users. Focus on admin-heavy roles, project managers, and senior leadership. Measure actual time savings over one month, then expand based on evidence.
For businesses that want AI productivity tools without the Copilot premium, see our best AI tools for business UK guide, which covers free and lower-cost alternatives across every category.
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Microsoft Copilot costs £16.10/user/month on top of M365. UK government pilot saved 26 min/day. Full pricing, Gemini comparison, and honest verdict for UK businesses.
