What will happen to my files when Windows 8.1 is updated to Windows 10?

Microsoft has told it's possible to update from Windows 7 or 8.1 to Windows 10 for free. My Acer Iconia W510 is already waiting for a bigger update which is going to take place later this year. I hope to receive my copy of Windows 10 in the second half of 2015.

Those were the good news. The downside is there is absolutely no mention how this update is done! Will Windows 10 install wipe out all my files? Or will Windows 10 sit on top of Windows 8.1?

My Acer Iconia W510 has a very limited hard disk with only 32 GB of space for files. At the moment with Windows 8.1 installed there is no room for Windows 10 image. I guess this is the situation many users have. Not too many people know how much free disk they have. And this leads to a situation where no updates are done. Simply put there is too little knowing among people.

Microsoft, will you keep my files in safe after Windows 10 update and if so, will my Acer run as quick as possible?