Microsoft has announced a major change to its Microsoft 365 subscription plans, replacing individual OneDrive storage allowances with a shared 2TB cloud storage pool for Microsoft 365 Family and Premium subscribers. The change, introduced on October 8, 2026, could significantly affect families and households that rely on Microsoft’s cloud services to store photos, videos, documents, and backups.
From 6TB To 2TB: A 67% Reduction
Previously, Microsoft 365 Family and Premium subscriptions offered up to six users 1TB of OneDrive storage each, providing a potential total of 6TB per subscription. Under the new arrangement, all members must share a combined 2TB allowance.
This represents a reduction of up to 66.7% in total storage for households using all six individual allocations. If divided equally among six people, the new allowance works out to approximately 333GB per person, although members can use more or less depending on their individual needs.
Microsoft describes the change as:
“This approach provides more flexibility by making storage available to the people who need it most”.
Since Microsoft, not the user, is getting the 4 TB storage, does this mean that Microsoft needs it most?
When Will the Change Take Effect?
New and upgraded Microsoft 365 Family and Premium subscriptions are subject to the shared storage model immediately. Existing subscribers, however, will generally retain their current storage arrangements until their first subscription renewal on or after May 2, 2027. Microsoft says customers will receive advance notification.
How Storage Will Work By Subscription
Microsoft 365 Basic
- Includes 100 GB of cloud storage for one person
- Storage is available only to the account holder
Microsoft 365 Personal
- Includes 1 TB of cloud storage for one person
- Storage is dedicated to the account holder
Microsoft 365 Family
- Includes 2 TB of shared storage for members of the subscription
- Storage is shared across the subscription rather than assigned individually
Microsoft 365 Premium
- Includes 2 TB of shared storage for members of the subscription
- Storage is shared across the subscription rather than assigned individually
Microsoft 365 Pro
- Includes 5 TB of shared storage for members of the subscription
- Storage is shared across the subscription rather than assigned individually
Price Reduction?
But with a 67% decrease in storage! Surely, the subscription price will be dropping by 67%?
No, the subscription price is not dropping accordingly (and don’t call me Shirley).
In fact, they are offering the new Microsoft 365 Pro plan with 5 TB of shared storage (a 16% reduction in storage), but at a hefty $100 per month!
Bottom Line
Microsoft is changing its Microsoft 365 Family and Premium plans from individual 1TB OneDrive allowances to a shared 2TB pool, reducing total potential storage by up to 67%. Existing subscribers will generally keep their current allowances until renewal on or after May 2, 2027. Despite the significant storage cut, subscription prices will not drop proportionately.
Let us know what you think of this Microsoft decision in the comments.
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Thanks John
How much money has Microsoft has been throwing into Ai recently ? Answer – a helluva lot ! So it’s hardly surprising they are now playing Scrooge and starting to reclaim expensive storage space to pay for it. I wonder how long before Google follows ? I am just so glad I invested in my own “cloud” NAS system a couple of years ago !
Cheers
Reg
Reg,
Microsoft says that reducing your storage by 67% gives you the user more flexibility! Also, I believe Microsoft used to offer unlimited storage and then dropped it to 6 TB, now down to 2 TB.
Google already lowered its storage. They used to offer unlimited photo storage (if stored in the default compressed format) and then switched to shared 15 GB in the “free” Google account.
I always thought that the subscription model was a rip-off so I paid the $400 price tag for the desktop version when I had my computer built in 2020.
Additionally, in an emergency I can use Microsoft Word and Excel on systems running Windows 7 or XP.
Hi Dave,
Thanks for the comment. But, the main selling point of the subscription model when it 1st came out was unlimited storage. Then they decreased it to 6 TB. Now they are decreasing it to 2 TB. And, they are saying that lowering the storage provides “more flexibility” to the “people who need it most”. Still doesn’t make sense.
That’s why I have an 8 TB hard drive back-up. I don’t save anything on the cloud.
Given the relative prices of external hard drives these days, why would anyone want to store their files on what amounts to someone else’s hard drive. I keep an offline HDU for backups.