UK SMEs are spending nearly half their annual turnover on technology, with the most innovative businesses investing 48% of their revenue in tech solutions. Yet here's the uncomfortable truth: most business owners have absolutely no idea what their managed service provider (MSP) actually does for them.
Last month, we spoke with a construction firm owner who was paying £3,200 monthly for "full IT management." When asked what services that included, his response? "They fix things when they break." That £38,400 annual investment was buying him reactive support – essentially expensive break-fix under the guise of modern managed services.
Current UK MSP pricing ranges from £55-£95 per user monthly for fully managed support, escalating to £100-£160+ for strategic IT partnerships. But here's what most SME owners don't realise: there's a massive difference between what providers promise and what they actually deliver.
The MSP Pricing Maze: What You're Actually Buying
Most MSPs blend multiple pricing models rather than stick to one approach, which creates confusion for business owners trying to understand their bills.
The three main models you'll encounter are:
Per-User Pricing: You pay for each employee. Sounds simple, but what happens when someone uses three devices? Or when your part-time staff share computers? Per-user models typically include support for all employee devices (laptop, mobile, tablet), but the reality is messier.
Per-Device Pricing: About 28% of MSPs charge between £50-£100 per device monthly. This model falls apart with modern working patterns. Device proliferation through mobile, BYOD, and IoT complicates the count, while managing smartphones, tablets, and cloud-only endpoints adds complexity.
Fixed-Fee Models: Also termed "cake" pricing, this flat-fee model means an MSP provides all services at a single fixed rate, essentially acting as an extension of the client's IT department.
A medium security posture MSP could insist on a minimum security bundle consisting of multiple products, costing the MSP itself easily £20 per user monthly just for customer protection. If you're paying less than £50 per user, question what's actually included.
The London Factor: Why Location Dramatically Affects Pricing
Operating costs in London and the Surrey commuter belt are higher, reflected in engineer salaries, but the benefit is having local experts who can be on-site in Sutton, Croydon, or the City within the hour.
In London, hundreds of MSPs operate with varied pricing due to higher office and staff costs, serving a range of customers. But here's the twist: offshore teams don't automatically mean lower pricing, as they often offset local staff shortages or salary inflation.
We've seen London-based firms paying £150+ per user monthly for services that a Birmingham MSP delivers for £80. The difference? Response times, local presence, and frankly, market positioning.
What Your MSP Should Actually Include (But Probably Doesn't)
A professional MSP contract should include unlimited remote and on-site support, proactive 24/7 monitoring and patch management, advanced cybersecurity (MFA, Endpoint Protection), backup and disaster recovery management, and regular Virtual CIO reviews.
Yet most SME owners are getting:
- Reactive support masquerading as "monitoring"
- Basic antivirus instead of comprehensive security
- Backups that have never been tested
- Monthly bills with zero strategic value
Ask your MSP this simple question: "When did you last prevent a problem before I knew about it?" If they can't give specific recent examples, you're paying for expensive break-fix support.
The 2026 Reality: Skills Shortage Driving Quality Down
A major challenge for 2026 is the talent war, with mid-sized MSPs struggling to retain level 3 engineers who are being poached by large enterprises or vendors. Cost friction is peaking due to wage inflation and the UK IT skills gap.
What this means for you: many MSPs are using less experienced technicians while charging premium rates. Established providers with specialised skills may charge higher rates than newer MSPs, but they often provide higher-quality, more reliable services.
The market reality is stark. The UK has more than 11,000 active MSPs generating combined annual revenue of £52.6 billion, but quality varies dramatically.
Red Flags That Your MSP Is Overcharging
No Clear Service Level Agreements
If they can't commit to specific response times with penalties, you're not getting managed services.
Reactive-Only Support
Some companies use 'managed services' as a marketing term, offering little more than basic break-fix support.
Hidden Project Costs
If your MSP uses unpredictable pricing, additional services will require separate engagements even for basic application setup.
No Monthly Business Reviews
You should receive strategic guidance, not just technical fixes.
The Smart Buyer's Approach: Questions That Matter
Before signing any MSP contract, demand clear answers to:
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"What specific problems have you prevented for similar businesses?" Look for measurable examples, not vague promises.
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"How do you handle cybersecurity incidents?" Traditional providers charge an average of £50,000+ for cybersecurity incident response and recovery. This should be included.
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"What's your actual response time guarantee?" Service level agreements are often set as worst-case numbers designed not to be missed, while some providers offer Service Level Targets to better align goals.
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"How do you measure success?" They should track uptime, prevented incidents, and business impact, not just ticket closure times.
The Bottom Line
It's about value, not just cost. A £50/user MSP that prevents problems and includes comprehensive security delivers far more value than a £120/user provider offering glorified helpdesk support.
Looking Forward: The Consolidation Wave
M&A activity continues reshaping the MSP market, creating larger providers with broader portfolios and deeper specialisms. Consolidation brings scale, but raises customer expectations around integration, governance and service quality.
For SME owners, this means opportunity. As the market consolidates, the gap between premium providers and basic support companies becomes clearer. Simply claiming to offer managed services is no longer enough. Partners must demonstrate proactive management and top-quality service delivery.
The SMEs winning in 2026 will be those who understand exactly what they're buying from their MSP – and demand measurable value for every pound spent. Don't be the construction firm owner paying £38,400 annually for expensive break-fix support.
Your technology investment should drive growth, not drain resources. If you can't clearly articulate what your MSP delivers beyond "fixing things," it's time for a serious conversation about value.
Need help evaluating your current MSP arrangement or exploring alternatives? Our automation specialists can help you understand what you should expect from your technology investment.