"Why can't I backup my iPhone with available storage?: This question has been asked many times, but the answer seems to be always „just buy more storage space“. In my case, I have just used 148 MB used from the 5GB, yet supposedly I don’t have enough space for a backup for a new phone of a week? I have virtually everything disabled what you can save, yet I still get this silly message. It seems for me that Apple is forcing people just to buy additional storage, although there is enough place for a backup."
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Failing iCloud Backup:
In this screenshot, it depicts that "Last attempt failed" in iCloud Backup pane. Go Here: If you can't Back Up to iCloud - Apple Support
Troubleshooting Storage:
A. Troubleshooting iCloud Drive:
Export All of iCloud Drive: If it seems you don't have lots of space in iCloud Drive, then you can download all of it to an external hard drive > confirm that you can access the data > trash what's in iCloud. Use my User Tip: Getting a Quick and Direct "iCloud Drive-to-External Hard Drive" Download - Apple Support
B. Troubleshooting iPhone Storage:
Internal storage cannot be upgraded. It is what it is. So, the maximum internal storage capacity never increases, even if you upgraded your iCloud plan. Learn More here: What's the Difference Between Device Storage and iCloud Storage? Apple Support
So, what to do...
Clear Space Using my User Tips: