O365 Admin

How to Set Up Retention Policies in Microsoft 365

Published 25 February 2026 · 7 min read

Retention policies ensure important data is kept for compliance and that data due for deletion is removed on schedule. This guide covers creating retention policies in Microsoft Purview for Exchange, SharePoint, OneDrive, and Teams.

How retention works

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Retention is invisible to users
When a retention policy is applied, users see content as normal. If they delete it, a copy is kept in a hidden library until the retention period ends - available for eDiscovery.
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Common retention scenarios
Retain email 7 yearsCommon for UK financial services
Exchange, 7 years, retain then delete
Retain SharePoint 5 years
SharePoint sites, 5 years
Retain Teams chats 3 years
Teams chats and channel messages
Delete email older than 2 yearsCheck legal requirements first
Exchange, 2 years, delete only

Create a retention policy

Microsoft Purview → Data lifecycle management → Retention policies → + New retention policy
  1. Name the policy descriptively
  2. Select locations (Exchange, SharePoint, OneDrive, Teams)
  3. Choose retain, delete, or retain then delete
  4. Set the retention period

Teams-specific retention

Teams channel messages and Teams chats are separate locations - configure both. Files shared in Teams are stored in SharePoint/OneDrive and covered by those policies. Private channel messages are stored separately from standard channels.

Frequently Asked Questions

Q: Do retention policies apply to existing content?

Yes. Retention policies apply to existing content as well as new content.

Q: What is the difference between retention and a legal hold?

A legal hold preserves specific content for a legal matter. Retention policies apply to broad categories on a schedule. Use legal holds for litigation.

Q: What licences do I need for retention policies?

Basic retention requires E3 or the Microsoft 365 Compliance add-on. Advanced features like record management require E5 Compliance.

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