Retention works both ways
A firm that sends work out is usually on both sides of retention: the client holds some of your money, and you hold some of your subcontractors'. The difference between the two is your own cash tied up until the releases come.
On a £100,000 contract with 5% retention, £5,000 is held. Half, £2,500, comes back at practical completion on Monday 30 November 2026, and the rest, £2,500, at the end of a twelve month defects period on Tuesday 30 November 2027.
Diary the release dates
Retention is often lost by being forgotten. Diary both release dates the day the job reaches practical completion, and send the invoice for each release on the day it falls due.
Questions
When is retention released?
When the contract says. A common pattern is half at practical completion and the rest at the end of the defects period, often twelve months later, but your contract's terms are the ones that count.
Is retention being banned?
Not yet. The Commercial Payments Bill, before Parliament in 2026, would ban retention in construction contracts after a transition period. It is not law, so for now retention is set by your contract.
Sources
The rates, thresholds and dates on this page come from these official sources, read on 31 October 2026.