The UK is looking to ban retentions. Are you ready?
The UK Government's late payments consultation has proposed banning the practice of withholding retention money under construction contracts, with 87% of respondents favouring reform — and the government has committed to working with the financial services sector to develop the surety market.
United Kingdom · Market briefing · 3 min read
What's on the table
Retention money — the slice of each payment withheld until the end of a project — has been a fixture of UK construction contracts for decades, and a persistent source of late and lost payments for contractors. The consultation puts three signals on the record:
87% of respondents favoured reform
Support for changing retention practices in UK construction is broad. The consultation's proposed remedy is to ban withholding retention money under construction contracts altogether.
A 12–24 month transition, if the ban proceeds
Respondents supported a transitional period of 12 to 24 months before a ban takes effect. For contractors, that window is preparation time — the moment to put management tooling in place, not to wait.
Surety as the government's named alternative
The government has committed to working with the financial services sector to develop the surety market. If retentions go, surety bonds are the instrument positioned to replace them as project security.
— Whatever happens next
Whether the ban goes ahead, retentions are protected through alternative mechanisms, or the status quo holds — contractors who use surety bonds need proper management tools. And the two outcomes are covered from both sides: Retention Track manages retention money; bondtrack manages surety bonds.
How bondtrack helps
bondtrack is available nationwide in the UK, positioned for the evolving surety market. A shift from retentions to bonds is a shift from a deduction you track in payment schedules to an instrument portfolio you have to manage — which is exactly the job the platform is built for.
A portfolio view before the portfolio grows
If retentions give way to surety bonds, contractors will hold more instruments across more projects. bondtrack's centralised portal keeps bonds, bank guarantees, applications, facilities, and projects in one always-current view — instead of spreadsheets that grow with the problem.
Structured returns from day one
The cost of a bond doesn't end at issue — instruments left unreturned keep drawing facility capacity and extension premiums. bondtrack's return workflows chase, record, and reconcile returns so capacity is released when the project is done.
Extension costs, quantified
bondtrack measures exactly what late returns cost in extension premiums, so a growing UK bond portfolio comes with accountability built in rather than bolted on.
Reconciled against issuer statements
As bond volumes rise, so do discrepancies. bondtrack automatically reconciles bond and guarantee records against issuer statements, catching mismatches before they become problems.
The takeaway
The consultation is not yet law, and the final shape of reform is an open question. But the direction of travel is clear enough that contractors relying on retentions today should understand the surety alternative now — and contractors already providing bonds should have their portfolio properly organised before it grows.
This briefing is for general information only and does not constitute legal or financial advice. Contractors should seek independent advice on how any reform affects their specific contracts.
Get ahead of the shift to surety.
Register your interest and our team will show you how bondtrack manages a growing UK bond portfolio — from application to return.
Register Your Interest