Retention Calculator

Retention is a percentage deducted from each interim payment and held by the client as security against defects. It gives the contractor an incentive to return and fix any issues that arise after handover. Half is normally released at practical completion and the balance at the end of the rectification (defects liability) period.

Typically half is released at practical completion when the project is handed over (2.5% of the contract value if 5% retention is held), and the remaining half at the end of the rectification (defects liability) period. The JCT default Rectification Period is 6 months, though contracts are commonly amended to 12 months.

In practice, yes — 5% is the most common rate used in UK construction. But the JCT Standard Building Contract default Retention Percentage is actually 3%; main contractors almost always amend it up to 5% (some contracts go to 10%). NEC4 (Option X16) sets the percentage in the Contract Data and has no fixed default. So 5% is the typical market figure, not the contractual default.

Yes, particularly if you have a strong track record, quality accreditations, or offer a retention bond (insurance guarantee) instead. Some progressive clients agree to zero retention with a bond. Always negotiate before signing the contract.

The right to retention is contractual, but the Construction Act 1996 gives you the mechanism to enforce it: serve a payment notice and, if still unpaid, refer the dispute to adjudication (you have a statutory right to adjudicate at any time). Since the 2011 amendments, s.110(1A) also bars a sub-contract from making your retention release conditional on main-contract events. A separate retention trust account is a JCT contract option available on the contractor’s request — it is often amended out — and is not required by the Act. Specialist construction adjudicators and solicitors can assist; fee arrangements vary.

The Commercial Payments Bill [HL], introduced in May 2026, would prohibit cash retention in construction contracts. It is still progressing through Parliament and has not received Royal Assent, so retention remains lawful and in normal use; even once enacted the Bill provides a two-year transition period before existing retention clauses become ineffective.