diff --git a/cmake/svs.cmake b/cmake/svs.cmake
index 173b759c2..38ff79477 100644
--- a/cmake/svs.cmake
+++ b/cmake/svs.cmake
@@ -68,7 +68,7 @@ if(USE_SVS)
             elseif(GLIBCXX_VERSION VERSION_GREATER_EQUAL "12")
                 set(SVS_URL "https://github.com/intel/ScalableVectorSearch/releases/download/nightly/svs-shared-library-nightly-reduced-clang21-gcc12-2026-03-31-1147.tar.gz" CACHE STRING "SVS URL")
             elseif(GLIBCXX_VERSION VERSION_GREATER_EQUAL "11")
-                set(SVS_URL "https://github.com/intel/ScalableVectorSearch/releases/download/nightly/svs-shared-library-nightly-reduced-clang21-gcc11-2026-03-31-1147.tar.gz" CACHE STRING "SVS URL")
+                set(SVS_URL "https://github.com/intel/ScalableVectorSearch/releases/download/nightly/svs-shared-library-reduced-clang21-gcc11-2026-06-18-1414.tar.gz" CACHE STRING "SVS URL")
             else()
                 message(STATUS "libstdc++ >= GCC 11 is required for Clang SVS binaries - disabling SVS_SHARED_LIB")
                 set(SVS_SHARED_LIB OFF)
@@ -80,9 +80,9 @@ if(USE_SVS)
     else()
         if(GLIBC_VERSION VERSION_GREATER_EQUAL "2.28")
             if(CMAKE_CXX_COMPILER_VERSION VERSION_GREATER_EQUAL "14.0")
-                set(SVS_URL "https://github.com/intel/ScalableVectorSearch/releases/download/v0.3.0/svs-shared-library-0.3.0-reduced-gcc14.tar.gz" CACHE STRING "SVS URL")
+                set(SVS_URL "https://github.com/intel/ScalableVectorSearch/releases/download/nightly/svs-shared-library-reduced-gcc14-2026-06-18-1414.tar.gz" CACHE STRING "SVS URL")
             else()
-                set(SVS_URL "https://github.com/intel/ScalableVectorSearch/releases/download/v0.3.0/svs-shared-library-0.3.0-reduced.tar.gz" CACHE STRING "SVS URL")
+                set(SVS_URL "https://github.com/intel/ScalableVectorSearch/releases/download/nightly/svs-shared-library-reduced-2026-06-18-1414.tar.gz" CACHE STRING "SVS URL")
             endif()
         elseif(GLIBC_VERSION VERSION_GREATER_EQUAL "2.26")
             set(SVS_URL "https://github.com/intel/ScalableVectorSearch/releases/download/v0.3.0/svs-shared-library-0.3.0-reduced-glibc2_26.tar.gz" CACHE STRING "SVS URL")
diff --git a/deps/ScalableVectorSearch b/deps/ScalableVectorSearch
index 02dea9d9c..bbe38c82e 160000
--- a/deps/ScalableVectorSearch
+++ b/deps/ScalableVectorSearch
@@ -1 +1 @@
-Subproject commit 02dea9d9cd1c73dc03dc0fd91d14a548f1aece70
+Subproject commit bbe38c82e2e6dc2c65749ae115fe486a5892049e
diff --git a/src/VecSim/algorithms/svs/svs_extensions.h b/src/VecSim/algorithms/svs/svs_extensions.h
index 3903d2289..2e93a6a58 100644
--- a/src/VecSim/algorithms/svs/svs_extensions.h
+++ b/src/VecSim/algorithms/svs/svs_extensions.h
@@ -115,7 +115,8 @@ struct SVSStorageTraits<DataType, QuantBits, ResidualBits, false,
     static auto make_blocked_allocator(size_t block_size, size_t dim,
                                        std::shared_ptr<VecSimAllocator> allocator) {
         // SVS block size is a power of two, so we can use it directly
-        auto svs_bs = svs_details::SVSBlockSize(block_size, element_size(dim));
+        auto elem_size = std::max(primary_element_size(dim), residual_element_size(dim));
+        auto svs_bs = svs_details::SVSBlockSize(block_size, elem_size);
         allocator_type data_allocator{std::move(allocator)};
         return svs::make_blocked_allocator_handle({svs_bs}, data_allocator);
     }
@@ -144,8 +145,8 @@ struct SVSStorageTraits<DataType, QuantBits, ResidualBits, false,
         return svs::lib::load_from_disk<index_storage_type>(path, /*alignment=*/0, blocked_alloc);
     }
 
-    static constexpr size_t element_size(size_t dims, size_t alignment = 0,
-                                         size_t /*leanvec_dim*/ = 0) {
+    static constexpr size_t primary_element_size(size_t dims, size_t alignment = 0,
+                                                 size_t /*leanvec_dim*/ = 0) {
         using primary_type = typename index_storage_type::primary_type;
         using layout_type = typename primary_type::helper_type;
         using layout_dims_type = svs::lib::MaybeStatic<index_storage_type::extent>;
@@ -153,6 +154,23 @@ struct SVSStorageTraits<DataType, QuantBits, ResidualBits, false,
         return primary_type::compute_data_dimensions(layout_type{layout_dims}, alignment);
     }
 
+    static constexpr size_t residual_element_size(size_t dims, size_t alignment = 0) {
+        if constexpr (ResidualBits == 0) {
+            return 0;
+        } else {
+            using residual_type = typename index_storage_type::residual_type;
+            using dims_type = svs::lib::MaybeStatic<index_storage_type::extent>;
+            auto residual_dims = dims_type{dims};
+            return residual_type::total_bytes(residual_dims);
+        }
+    }
+
+    static constexpr size_t element_size(size_t dims, size_t alignment = 0,
+                                         size_t leanvec_dim = 0) {
+        return primary_element_size(dims, alignment, leanvec_dim) +
+               residual_element_size(dims, alignment);
+    }
+
     static size_t storage_capacity(const index_storage_type &storage) {
         // LVQDataset does not provide a capacity method
         return storage.size();
@@ -191,7 +209,8 @@ struct SVSStorageTraits<DataType, QuantBits, ResidualBits, true> {
     static auto make_blocked_allocator(size_t block_size, size_t dim,
                                        std::shared_ptr<VecSimAllocator> allocator) {
         // SVS block size is a power of two, so we can use it directly
-        auto svs_bs = svs_details::SVSBlockSize(block_size, element_size(dim));
+        auto elem_size = std::max(primary_element_size(dim), secondary_element_size(dim));
+        auto svs_bs = svs_details::SVSBlockSize(block_size, elem_size);
         allocator_type data_allocator{std::move(allocator)};
         return svs::make_blocked_allocator_handle({svs_bs}, data_allocator);
     }
@@ -223,11 +242,20 @@ struct SVSStorageTraits<DataType, QuantBits, ResidualBits, true> {
         return svs::lib::load_from_disk<index_storage_type>(path, /*alignment=*/0, blocked_alloc);
     }
 
+    static constexpr size_t primary_element_size(size_t dims, size_t alignment = 0,
+                                                 size_t leanvec_dim = 0) {
+        return SVSStorageTraits<DataType, QuantBits, 0, false>::element_size(
+            check_leanvec_dim(dims, leanvec_dim), alignment);
+    }
+
+    static constexpr size_t secondary_element_size(size_t dims, size_t alignment = 0) {
+        return SVSStorageTraits<DataType, ResidualBits, 0, false>::element_size(dims, alignment);
+    }
+
     static constexpr size_t element_size(size_t dims, size_t alignment = 0,
                                          size_t leanvec_dim = 0) {
-        return SVSStorageTraits<DataType, QuantBits, 0, false>::element_size(
-                   check_leanvec_dim(dims, leanvec_dim), alignment) +
-               SVSStorageTraits<DataType, ResidualBits, 0, false>::element_size(dims, alignment);
+        return primary_element_size(dims, alignment, leanvec_dim) +
+               secondary_element_size(dims, alignment);
     }
 
     static size_t storage_capacity(const index_storage_type &storage) {
diff --git a/src/VecSim/algorithms/svs/svs_utils.h b/src/VecSim/algorithms/svs/svs_utils.h
index 8dfa23d53..7d90f97c9 100644
--- a/src/VecSim/algorithms/svs/svs_utils.h
+++ b/src/VecSim/algorithms/svs/svs_utils.h
@@ -167,13 +167,14 @@ joinSearchParams(svs::index::vamana::VamanaSearchParameters &&sp,
 // @param bs VecSim block size
 // @param elem_size SVS storage element size
 // @return block size in type of SVS `PowerOfTwo`
-inline svs::lib::PowerOfTwo SVSBlockSize(size_t bs, size_t elem_size) {
+inline svs::data::BlockingParameters SVSBlockSize(size_t bs, size_t elem_size) {
     auto svs_bs = svs::lib::prevpow2(bs * elem_size);
     // block size should not be less than element size
     while (svs_bs.value() < elem_size) {
         svs_bs = svs::lib::PowerOfTwo{svs_bs.raw() + 1};
     }
-    return svs_bs;
+    auto svs_bs_elems = svs::lib::prevpow2(bs);
+    return svs::data::BlockingParameters{svs_bs, svs_bs_elems};
 }
 
 // Check if the SVS implementation supports Quantization mode
diff --git a/tests/unit/test_svs.cpp b/tests/unit/test_svs.cpp
index 415add1fc..764f17316 100644
--- a/tests/unit/test_svs.cpp
+++ b/tests/unit/test_svs.cpp
@@ -1970,22 +1970,6 @@ TYPED_TEST(SVSTest, svs_vector_search_test_cosine) {
 TYPED_TEST(SVSTest, testSizeEstimation) {
     size_t dim = 64;
     auto constexpr quantBits = TypeParam::get_quant_bits();
-#if HAVE_SVS_LVQ
-    // SVS block sizes always rounded to a power of 2
-    // This why, in case of quantization, actual block size can be differ than requested
-    // In addition, block size to be passed to graph and dataset counted in bytes,
-    // converted then to a number of elements.
-    // IMHO, would be better to always interpret block size to a number of elements
-    // rather than conversion to-from number of bytes
-    if constexpr (quantBits != VecSimSvsQuant_NONE) { // constexpr eliminates div-by-zero warning;
-                                                      // inner condition is runtime-only
-        if (!this->isFallbackToSQ()) {
-            // Extra data in LVQ vector
-            const auto lvq_vector_extra = sizeof(svs::quantization::lvq::ScalarBundle);
-            dim -= (lvq_vector_extra * 8) / quantBits;
-        }
-    }
-#endif
     size_t n = 0;
     size_t bs = DEFAULT_BLOCK_SIZE;
 
@@ -2016,8 +2000,7 @@ TYPED_TEST(SVSTest, testSizeEstimation) {
     GenerateAndAddVector<TEST_DATA_T>(index, dim, 0);
     actual = index->getAllocationSize() - actual; // get the delta
     ASSERT_GT(actual, 0);
-    // LVQ element estimation accuracy is low
-    double estimation_accuracy = (quantBits != VecSimSvsQuant_NONE) ? 0.1 : 0.01;
+    double estimation_accuracy = 0.01;
     ASSERT_GE(estimation * (1.0 + estimation_accuracy), actual);
     ASSERT_LE(estimation * (1.0 - estimation_accuracy), actual);
 
diff --git a/tests/unit/test_svs_tiered.cpp b/tests/unit/test_svs_tiered.cpp
index 88f5b715a..9542e7cd6 100644
--- a/tests/unit/test_svs_tiered.cpp
+++ b/tests/unit/test_svs_tiered.cpp
@@ -3199,7 +3199,13 @@ TYPED_TEST(SVSTieredIndexTestBasic, runGCAPI) {
     size_t dim = 4;
     size_t threshold = 1024;
     const size_t n = threshold * 3;
-    SVSParams params = {.type = TypeParam::get_index_type(), .dim = dim, .metric = VecSimMetric_L2};
+    // svs::data::SimpleData::resize() keeps 1 empty block in case of size reducing, so we need to
+    // make sure that we have at least 2 blocks of vectors to be deleted:
+    const size_t block_size = threshold / 2;
+    SVSParams params = {.type = TypeParam::get_index_type(),
+                        .dim = dim,
+                        .metric = VecSimMetric_L2,
+                        .blockSize = block_size};
     VecSimParams svs_params = CreateParams(params);
     auto mock_thread_pool = tieredIndexMock();