Hi Karen,
Updraft doesn’t provide any of their own storage for free. But, as David answered previously:
the free version of UpdraftPlus includes support for Dropbox, Google Drive and Amazon S3, all of which provide free tiers.
You can connect your Updraft plugin with any of the above third-party services from within the ‘Settings’ tab in the Updraft ‘Backup/Restore’ settings page.
Yes, Megabytes are smaller than Gigabytes – 1 Gigabyte is 1000 Megabytes.
It’s not really Updraft/Vault storage’s responsibility to tell you that you’re not using all of the storage space that you purchased and you should really take this up with your hosting company as they’ve clearly misadvised you about your backup storage requirements.
In the Updraft ‘Backup/Restore’ page under ‘Existing Backups’ you can see how much storage space is being used by your existing backups and, depending on the number of backups you have stored, you should be able to calculate your backup storage requirements.