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I logged into OneDrive today and received this message:

enter image description here

Seems like Microsoft are pushing Office 365 harder than ever, and are shrinking my 25GB OneDrive account to 5GB in a few months. However, I am using 39.1GB/40GB of space on the free plan.

What will happen to my files if I am still over this limit by the 10/08/2016?

Will my loyalty bonus still apply?

This is my current storage status:

enter image description here

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For the free OneDrive plan, there is still quite a bit of time (as you've seen from the expiration date on your screenshot).

The One Drive Storage Changes FAQ delineates the specific rules:

What happens if I’ll be over my limit when these changes take effect?

We will be actively communicating with our users as these changes start rolling out via email and in-product notifications. These notifications will start at least 90 days before the changes take effect to ensure that you have enough time to act or make changes.

If you have a free OneDrive plan and will be over your storage quota as a result of these changes:

  • If you are a free user and have over 5 GB of content in your OneDrive, you will receive an email with an offer to claim a free 1-year subscription to Office 365 Personal*, which includes 1 TB of storage.

  • If you do not claim this offer, you will need to purchase additional storage or remove some of your files. Otherwise, 90 days after you receive your first notice, your account will become read-only.

  • If you are over quota after the 90 days, you will still have access to your files for 9 months. You can view and download them. However, you will not be able to add new content.

  • If after 9 months you are still over quota, your account will be locked. That means that you will not be able to access the content in your OneDrive until you take action.

  • If after 6 more months you fail to take action, your content may be deleted.

In terms of the loyalty bonus, since it doesn't have the standard expiration date (I have the same date cited on my accounts) on it, that capacity should remain on your account (further confirmed here and, as cited on that page, from the horse's mouth on the MS representative's Twitter feed). The free plan bonus will evaporate, though.

Different rules apply if you are an existing Office365 subscriber on the 1Tb plan, and those are available on that same page.

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