What is retention and when do you get it back?
Retention is a part of each payment that the payer holds back as security until the work is finished and any defects have been put right. Your contract sets how much, and when it is released.
What retention is
On a retention job, each valuation or invoice is paid less a percentage. The payer keeps that money as security against defective work, or against the contractor going bust.
It is money you have earned but not yet been paid, so treat it as something to track and claim.
How much
The contract sets the percentage, so read it. A government consultation in 2017 described the payer holding back a percentage, typically 5 percent, and its survey found averages of around 5 percent. That is common practice, not a rule, and your contract may be different.
Check too whether it applies to every payment, whether it stops at a cap, and whether materials and variations are included.
When it is released
The same consultation described the usual pattern as two stages. The first half is released at completion of the project, and the other half after the defects period ends, which it described as typically 12 to 24 months.
Your contract may use different terms and splits. Find out how it defines practical completion, who certifies it, how long the defects period is, and whether the end date is tied to the main contract if you are a sub-contractor.
Release does not always happen on its own. Ask for it in writing, quoting the clause of your contract that deals with retention, once the date has passed.
Keeping track of it
- Record the retention taken on every payment, as well as the gross value of the work.
- Keep a running total for each job and each customer, so you know what you are owed in all.
- Write down the practical completion date and the end of the defects period as soon as they are known.
- Set a reminder for the day the retention falls due, and another for a week before it.
- Keep a note of defects reported and put right, because open defects can hold up the release.
A job register with one line per job makes this easy to scan, and invoices that show retention as a separate line save you reconstructing it later.
The planned ban on retention
The government has introduced a Commercial Payments Bill in Parliament, in May 2026. It would stop payers deducting and holding back retention under construction contracts. GOV.UK says the timing is still to be consulted on, and that there will be a transition period before the measures take effect.
Until it is law and in force, retention is lawful and your contract applies. Check the current position on GOV.UK before you rely on this, because the Bill can change as it goes through Parliament.