A worked example: how £90,000 in retention can quietly turn into a loss

A note before you read this: this is a worked example, not a real client. We’ve built it from typical numbers and typical contract terms to show how retention risk actually compounds, since it’s easier to see in a concrete scenario than in the abstract. Any resemblance to a specific business is coincidental.

Say you run a mechanical and electrical subcontracting firm. Nothing unusual about the business: a handful of staff, a mix of commercial fit-out and residential jobs, turnover in the low millions. Over the last two years you’ve completed nine jobs. You’re currently owed retention on all of them.

What the ledger looks like

Across those nine jobs, retention adds up to £184,720. Spread like this:

• £43,200 is already past its release date and hasn’t been claimed
• £61,300 is due within the next 90 days
• £80,220 is still sitting inside the defects liability period, not yet due

Three of those jobs were with the same main contractor. Call them ABC Construction. Across those three jobs, ABC is holding £92,600 of your money, which is exactly half of everything you’re owed. You didn’t plan for half your retention to sit with one company. It happened because ABC was a good, reliable client who kept giving you work, which is normally a good problem to have.

Then something changes

Six weeks ago, ABC Construction filed a county court judgment against a different supplier. Two weeks ago, one of their directors resigned. Neither event made the news. Both are sitting on ABC’s public Companies House record, free for anyone to look up, the whole time.

Nobody at your firm was checking. Why would they. You’re running jobs, not reading company filings on contractors you already trust.

This is the moment the risk stopped being theoretical. A CCJ and a director departure aren’t proof a company is going under. They’re exactly the pattern that preceded Carillion’s collapse in 2018, which left thousands of subcontractors holding worthless claims against a business that owed them money it no longer had. Nobody can say for certain what happens next with ABC. What’s certain is that £92,600 of retention now sits with a company showing warning signs, and the honest response to that is to move faster on getting it back, not to wait and see.

What normally happens next: nothing

In most firms, nothing happens here. The CCJ isn’t on anyone’s radar. The £43,200 that’s already overdue stays overdue, because chasing ABC for it means an awkward phone call, and ABC is still sending new work your way. The relationship risk feels bigger than the financial one, even though it’s the financial one that’s actually growing.

What changes with a system watching

The same numbers, with retention tracked and Companies House monitored: the CCJ triggers a flag the day it’s filed, not months later. The flag doesn’t just say “ABC had a CCJ.” It says ABC has a CCJ, and you have £92,600 in retention outstanding with them across three jobs, £43,200 of which is already overdue. That’s the sentence that actually prompts action, because it turns a vague worry into a specific number attached to specific jobs.

From there, a formal release application goes out for the overdue amount, with interest added, sent under an authorised agent’s name rather than your own, so the ask doesn’t come from you directly. You approve it. It goes. You keep working with ABC on whatever’s still live, without having made the call yourself.

The point of the example

£92,600 sitting with one contractor showing early warning signs isn’t a dramatic, unusual situation. It’s what an ordinary retention ledger looks like for a lot of specialist subcontractors, most of whom have never laid their numbers out this way and have no visibility into what their main contractors’ public records actually say.

If you want to see your own version of this, send us your last ten completed jobs. We’ll build the real picture, free, and show you exactly what’s claimable now and what’s sitting where.