To save space fpwdman can compress the data file using the zlib library. If compression is switched (which is the default), then files will take about half as much space.
The Tools --> Zlib Compress command (or Alt-T, Alt-Z) toggles the compression on and off.
If you have an old password file which was saved before compression was introduced (version 1.0.5), it is easy to convert. Just toggle the compression OFF, then load the file as usual. If you want to save it in compressed format, just flip the toggle back ON before saving it under a new name.