Microsoft 365 Cuts OneDrive Storage for Family Plans in 2027

Microsoft is reworking how OneDrive storage is handed out to Microsoft 365 subscribers, and for many families the change amounts to a steep downgrade. The Family and Premium subscription tiers are moving from 1TB of storage per person to a single shared pool of 2TB for the whole plan. The new model already applies to new and upgraded subscriptions as of October 8, 2026, and existing subscribers switch at their first renewal on or after May 2, 2027.

What’s actually changing

Under the current system, each person added to a Microsoft 365 Family or Premium plan gets their own 1TB of OneDrive storage. Fill all six available slots on a Family plan and that adds up to 6TB total across the household. Once the new model kicks in, all six people will instead draw from one shared 2TB pool.

Do the math on a fully loaded six-person plan and that works out to roughly 333GB per person if the space is split evenly. That’s a steep drop from the 1TB each person currently gets, even though Microsoft’s messaging frames the switch as added flexibility since unused space from one member can now be used by another.

Who is affected and who isn’t

The storage cut applies specifically to Family and Premium subscribers. Microsoft 365 Pro subscriptions are also changing, but far less dramatically, moving to a 5TB shared pool across all members on that plan instead of per-person allotments. Single-user plans like Basic and Personal aren’t affected at all, since there’s no additional storage to split up when a subscription only covers one account.

The timing gives current subscribers some breathing room. For people who already subscribe, the new storage model won’t apply until their first renewal on or after May 2, 2027, so they don’t lose space overnight. Microsoft also says eligible subscribers can buy additional storage, up to 10TB in total, though it has not given a single price for it. Families with cloud-heavy habits still have several months to plan around the change, whether that means archiving old files, moving photos and videos elsewhere, or reconsidering the subscription entirely.

Why this matters for your household

Cloud storage is one of the main reasons people justify paying for Microsoft 365 Family or Premium instead of a cheaper single-user plan. A household storing years of phone backups, photos, and shared documents across multiple people could genuinely struggle to fit everything into a shared 2TB pool, especially if even one member is a heavy photo or video shooter. Families who were counting on that 1TB-per-person cushion may need to start budgeting storage the way they might budget data on a shared phone plan.

If you’re worried about running out of room once the change takes effect, it’s worth getting ahead of it now. Going through old files, deleting duplicates, and offloading large folders to local storage can buy breathing room no matter which cloud service you use, similar to the kind of cleanup covered in our guide on freeing up iCloud storage when it’s full.

The bigger picture

This isn’t the first time Microsoft has chipped away at the value of a Microsoft 365 subscription. The company raised prices in 2025, when the Family plan went from $99.99 to $129.99 a year, after bundling in AI features. Cutting cloud storage allowances on top of that price increase makes the subscription a harder sell for anyone who signed up primarily for the OneDrive space rather than the Office apps or AI extras.

For existing subscribers nothing changes immediately, and Microsoft hasn’t indicated this storage model will extend to Basic or Personal plans. But Family and Premium subscribers who rely heavily on shared cloud storage have a decision to make before May 2027: adapt to a smaller shared pool, offload files elsewhere, or look at the subscription’s overall value compared with alternatives.

The bottom line

Microsoft’s OneDrive storage cut shrinks the headline benefit of Family and Premium plans from generous per-person allowances to a much tighter shared pool. For existing subscribers it’s not an emergency, since it doesn’t take effect until their first renewal after May 2, 2027, but households that depend on ample cloud space should start planning now rather than getting caught off guard at renewal.

Sources: MobileSyrup, Pureinfotech