Microsoft 365 Family storage cut to 2TB: what changes

If you share a Microsoft 365 Family plan with your household, your OneDrive space is about to work very differently. Microsoft has replaced the 1TB of cloud storage each person used to get with a single 2TB pool that everyone on a Family or Premium plan shares. For a full plan of six people, that is a drop from up to 6TB to 2TB, at the same price. New subscribers get the new rules now, and existing subscribers move over at their first renewal on or after May 2, 2027. Microsoft is also letting family members share Copilot AI features for the first time. Here is exactly what changes, who loses out, what each plan costs and what you can do about it. (Sources and prices checked October 10, 2026 at 21:30 UTC / 03:00 IST October 11.)

What Microsoft changed

The change is laid out in a new Microsoft support page, "Changes to Microsoft 365 storage," which Neowin spotted first. Its key line: "Microsoft 365 Family and Premium subscriptions include 2 TB of shared cloud storage, and Microsoft 365 Pro includes 5 TB. The primary subscriber and up to five additional members draw from the same shared storage pool."

Until now, every person on a Family or Premium plan had their own 1TB of OneDrive space. Under the new model, nobody has a fixed allowance. Everyone's files come out of the same 2TB bucket, so one heavy user can take most of it, and a family of six where everyone uses OneDrive gets about 333GB each on average instead of 1TB. Microsoft stresses that only the space is shared, not the files: "While storage quotas are shared, files remain private."

New and upgraded subscriptions have used shared storage since October 8, 2026. In an email to Family and Premium subscribers seen by The Verge, Microsoft says the storage change "will apply after your first renewal after 2nd May, 2027."

Microsoft 365 storage by plan: before and after

Microsoft 365 Basic: 100GB for one person (unchanged).

Microsoft 365 Personal: 1TB for one person (unchanged).

Microsoft 365 Family: was 1TB for each of up to six people (up to 6TB in total). Now 2TB shared by everyone on the plan.

Microsoft 365 Premium: was 1TB for each of up to six people (up to 6TB in total). Now 2TB shared by everyone on the plan.

Microsoft 365 Pro: 5TB shared by up to six people. ZDNET says this top plan launched quietly in September 2026.

You can buy more space for the shared pool, up to 10TB in total, according to Microsoft. Storage bought by any member is added to the pool, and so are eligible members' free storage grants. ZDNET puts the cost of each extra 1TB at $10 a month.

Who loses out, and who actually gains

It depends on how many people on your plan really use OneDrive. If you are the only active user, the change is good news: you can now use the whole 2TB instead of being stuck at 1TB. If two people use the plan, you still have 2TB between you, the same total as before, just without a fixed split.

Three or more active users is where it hurts. Before, three people could store up to 3TB. Now they share 2TB. A full plan of six went from up to 6TB to 2TB. ZDNET's Ed Bott calls it "the cloud version of shrinkflation" and warns that families storing more than 2TB who do not want to delete anything "could be forced to move data or pay double or triple their current rates" once they buy extra storage.

Microsoft 365 prices: nothing changes

Prices stay the same, which is why the storage cut stings. Here is what Microsoft's US store lists (checked October 10, 2026, 21:27 UTC):

Microsoft 365 Personal: $9.99 a month or $99.99 a year (1TB, one person).

Microsoft 365 Family: $12.99 a month or $129.99 a year (2TB shared, up to six people).

Microsoft 365 Premium: $19.99 a month or $199.99 a year (2TB shared, up to six people, more AI features).

Microsoft 365 Pro: $99.99 a month, monthly billing only (5TB shared, the highest AI usage limits).

So the only way to keep more than 2TB without buying add-ons is Pro, which costs more than seven times as much as Family per month. PCWorld notes that Basic ($1.99 a month or $19.99 a year for 100GB) and Personal are not changing.

The good part: family members can share Copilot

The storage cut comes bundled with a change many families have asked for. Today Microsoft's support page is blunt: "AI benefits are only available to the subscription owner and cannot be shared with others." So on a Family plan, only the person who pays gets Copilot inside Word, Excel, PowerPoint and Outlook.

In its email to subscribers, Microsoft says that is changing "over the coming months." Members will be able to "share your Copilot benefits and AI usage with other members on your plan," and the plan owner will be able to "manage AI access for younger family members." Separate limits for each AI feature will turn into "a single AI usage allowance" you can spend on whichever advanced features you use most, and you will be able to buy more AI usage when you run out. ZDNET says buying extra AI credits will be an option on Premium and Pro.

The Verge points out a catch: moving to one shared allowance "could mean that some subscribers end up paying more for AI usage, depending on how they're using Copilot." Microsoft has not published the size of the shared AI allowance for each plan yet.

When the change hits your plan

New subscribers and anyone upgrading: shared storage applies from October 8, 2026.

Existing Family and Premium subscribers: nothing changes until your first renewal on or after May 2, 2027. Microsoft says you will get an email before your renewal.

If you upgrade early, you switch early. Microsoft says that if you move from Family to Premium before May 2, 2027, "your new shared storage allocation is 2 TB" straight away. A downgrade on its own does not move you to the new model before your 2027 renewal.

If your family is over the limit, you keep your files for now. Microsoft says you will be warned as you approach 2TB, and if you go over, "you can continue to access your files for up to one year while you manage your storage." It also says existing subscribers "in eligible markets might also qualify for transitional bonus storage" at no extra cost, and heavy users will get "advance notice and transition support." Microsoft has not said how much bonus storage, or for how long.

One open question: TechRadar notes it is not clear yet how the change works for people who prepaid for several years.

What to do now if you share a Family plan

Check how much your family actually uses. Microsoft says the storage dashboard in your Microsoft account shows how much space you are using. Add up everyone's OneDrive usage, including photos backed up from phones. If the total is under 2TB, you will barely notice the change.

Don't upgrade Family to Premium before 2027 just for the AI features if you rely on more than 2TB. Per Microsoft's own rules, the upgrade moves you onto shared storage immediately instead of in May 2027.

Use the time to clean up. Existing subscribers have at least seven months. Old phone backups, duplicate photos and big video files are the usual space hogs.

Compare the alternatives if you need lots of shared space. Apple's iCloud+ plans can also be shared with up to five other family members and cost $9.99 a month for 2TB, $29.99 for 6TB and $59.99 for 12TB in the US (apple.com, checked October 10, 2026, 21:30 UTC). Google One also offers family-shared storage. Remember that Microsoft 365 still includes the Office apps, which pure storage plans do not.

If you want to leave, Microsoft's support page says you can cancel at any time at account.microsoft.com/services/microsoft365 and keep your benefits until the end of the billing period.

Why Microsoft says it is doing this

Microsoft frames the change as flexibility: "Shared storage helps ensure that one person doesn't run out of space while other members have unused storage available." On whether this is a cut, its support page answers: "Total storage varies by plan, but the shared storage model gives you more flexibility in how you use storage across the subscription."

ZDNET's Ed Bott suspects a different motive: cracking down on power users who add spare Microsoft accounts to a Family plan to get extra terabytes for themselves. He also points out that Microsoft has done this before. In 2014 it offered unlimited OneDrive storage to Office 365 subscribers, then took it back a year later. The new shared model does bring Microsoft in line with Google One and Apple's iCloud+, which already pool family storage.

How subscribers are reacting

Not well, judging by the comments TechRadar collected. One Reddit user wrote: "Bad decision, they will find many customers cancel the auto renewal now." Another complained about a familiar cycle: "Something is cheap/liberal with features to gain customers, then jack up prices and cut features." TechRadar's Darren Allan concludes that "what was a great deal has become an okay deal" for storage, while PCWorld says it is "a big downgrade" for plans shared by three or more people.

The bottom line

For most single users and couples, Microsoft 365 Family is still a good deal, and the coming ability to share Copilot is a genuine improvement. For bigger households that really fill their OneDrive, the plan just lost up to two-thirds of its storage at the same price. If that is you, nothing happens until your first renewal on or after May 2, 2027, so check your family's total usage now and decide whether to clean up, buy add-on storage or move your files elsewhere.

Sources

Microsoft Support, "Changes to Microsoft 365 storage"; Microsoft Support, "How AI usage works across Microsoft 365 subscriptions for individuals" (updated October 2026); The Verge (Tom Warren, October 9, 2026); ZDNET (Ed Bott, October 2026); PCWorld (Hans-Christian Dirscherl and Joel Lee, October 9, 2026); TechRadar (Darren Allan, October 9, 2026), citing Neowin; Microsoft Store US plan and Copilot pricing pages (checked October 10, 2026, 21:27 UTC); Apple iCloud+ US pricing (checked October 10, 2026, 21:30 UTC).