Somewhere in your ledger there is a number that represents work you have already done, to a standard nobody has complained about, on a project that finished a long time ago. It is called retention. There is a decent chance you will never see all of it.
Retention is the most quietly accepted loss in the industry. Everybody grumbles about it, almost nobody manages it, and a surprising number of sub-contractors write it off in their own accounts before the payer has even refused to pay. It is treated as weather: unpleasant, inevitable, not really anybody's job. It is not weather. It is your money, and there is a reason it keeps ending up as somebody else's.
What retention is actually for
The principle is reasonable enough. A percentage of each payment, commonly three or five per cent, is deducted and held back as security. Half is typically released at practical completion, and the other half at the end of the rectification period once defects have been made good. The payer keeps a modest amount of leverage to make sure the works are finished and the snags are closed out. Fair enough.
The problem is not the concept. The problem is that retention is the only money in a construction contract that the payer benefits from not paying. Every other sum has someone chasing it, because someone needs it to fund the next month. Retention sits quietly, off everybody's radar, in a period after the project team has been demobilised and the people who knew the job have moved on. It survives on inattention.
The second half is where it goes wrong
The first tranche usually arrives, roughly, eventually. It is the second half that goes missing, and the reason is almost always the release trigger.
In sub-contracts, release is very often tied to events under the main contract rather than to your works. You can complete your package immaculately in March and still be waiting two years later, because the trigger is the making good of defects under a main contract whose completion date keeps moving, on a project you left long ago and hear nothing about. Your performance was never the issue. The clause was.
So read the trigger. It is the single most important sentence in the retention clause, and it is worth arguing about before you sign, when you still have something to trade. Ask a direct question: what specific event releases my second half, who certifies it, and what happens if that event never occurs? If nobody on the other side can answer clearly, that is your answer.
Retention is not money being held for you. It is your money, being used by someone else, with your permission.
It is not a fund. It is a book entry.
People talk about retention being held, as though it sits in a box somewhere with your name on it. Unless the contract requires the money to be placed in a separate trust account, and unless that account has actually been set up, nothing is being held at all. The cash is in the payer's working capital, funding their business. What you have is an entry in their ledger and a contractual right to be paid later.
That distinction stops being academic the moment the payer gets into difficulty. If they become insolvent, you are an unsecured creditor for your retention, standing in line with everyone else. Sub-contractors lose real money this way in every downturn, and the sums are rarely small, because retention accumulates quietly across several contracts at once.
If your contract gives you the right to require a separate trust account, use it, and use it early. Asking at the start of a job is a normal commercial conversation. Asking when the payer is visibly struggling is a request they will refuse, and the refusal will tell you something you would rather have known sooner.
Retention is a payment, so treat it like one
Here is the part that gets forgotten. Once retention falls due, it is a payment like any other. It runs through the same machinery as every other sum under the contract: a due date, a final date for payment, a payment notice, and a pay less notice if the payer wants to withhold. The Act's regime does not stop applying just because the money in question happens to be retention.
Which means a polite email asking whether there is any news on the retention is not worth very much. Make a proper application, in the form the contract requires, on time, for the retention sum. That starts the clock. If no valid payment notice or pay less notice follows, your position becomes considerably simpler, and considerably stronger.
The same goes for the old favourite: we cannot release your retention because the client has not released ours. Section 113 of the Act makes a provision conditioning payment on the payer first receiving payment from a third person ineffective, unless that third person is insolvent. If that argument is put to you, it is worth challenging rather than accepting as the way things are.
Time is the quiet killer
Retention claims go stale. Under the Limitation Act 1980, an action founded on simple contract must be brought within six years of the cause of action accruing, and twelve years where the contract was executed as a deed. That sounds like an eternity until you remember that the second tranche may not fall due for years after completion, and that in the meantime nobody is looking at it.
I have seen final accounts where the retention line has simply been abandoned. Not disputed, not adjudicated, not lost on the merits. Abandoned, then written off internally as a bad debt that was never actually pursued by anyone. That is not a legal problem. It is an administrative one, and it is entirely fixable.
What good looks like
The businesses that recover their retention consistently do a small number of unglamorous things:
- They record both release triggers at the start of the job, with the events and the certificates that unlock them, not just a vague note that says "PC plus 12 months".
- They chase certification as a document, not an opinion. A certificate of practical completion, and a certificate of making good, are what release the money. Verbal agreement that the works are finished releases nothing.
- They apply for retention formally rather than asking for it.
- They close out defects properly and keep the evidence, because a documented, signed-off snag list is the best possible answer to a late deduction.
- They keep a single register across every contract: retention held, both halves, trigger events, due dates, current status.
That last one matters more than it sounds. Most sub-contractors cannot tell you, today, what their total retention exposure is across all live and recently completed contracts. That figure is often a meaningful share of the year's profit, sitting on somebody else's balance sheet. It should be a number the business knows without having to go and work it out.
The difference between a profitable job and a break-even one is often not the variations or the delay claim. It is whether anybody remembered to go and collect the retention.
A ban is coming. It changes nothing yet.
Since this piece was drafted, the government has put a ban on retention into a Bill. The Commercial Payments Bill, introduced in the House of Lords in May 2026, would insert the ban into the Construction Act, with a two-year transition period after it is switched on. It is not law, it will not reach the retention you are already owed, and every contract signed in the meantime is under the old rules. I have set out exactly what it says, and what it does not, in a separate piece. For now, the advice below stands.
The last five per cent
Retention is the last few per cent of the contract sum, and on a lot of packages that is more than the margin on the whole job. Which puts it in an odd position: the money most likely to be forgotten is frequently the money the project's profitability depends on.
None of this requires a fight. It requires knowing what the trigger is, diarising it, applying for the money properly when it falls due, and following it up until it arrives. Retention is earned income that has already been banked by somebody else. There is nothing awkward about going to get it back.
This is the kind of thing Defender Platform is built to stop. It reads your contract, extracts the retention release triggers alongside every other date that matters, and keeps them in front of you long after the project team has moved on. Software or spreadsheet, the principle is the same: know the trigger, diarise it, go and collect.