Source: https://www.quantsurv.com/resources/glossary/retention-bond Content format: Markdown version of the public page. Content reviewed: 2026-09-30 # Retention bond: definition and example A separate security instrument that may replace cash retention on agreed terms. By [Jack Butler-Kettle]() · Updated 30 September 2026 Guidance for England and Wales. Check the contract, amendments and facts that apply to your job. ## What it means in practice Read this alongside [JCT explanation of retention and bonds in lieu](). A retention bond may replace cash retention where the parties agree. It creates a separate security arrangement with conditions governing any demand. Amount, expiry, reduction, cost and wording all matter; the existence of a bond does not automatically release cash unless the contract provides for that. Compare the proposed security with the subcontract and obtain advice on the instrument. [Retention loss prevention]() can help identify the release and record-keeping arrangements. ## Worked example ### The facts A subcontractor proposes a bond instead of £5,000 of cash retention. ### What happens 1. The parties agree whether the bond is acceptable and what security it provides. 2. They record when cash will be released and when the bond reduces or expires. ### What this shows The commercial benefit depends on the agreed replacement terms, not simply on obtaining a document called a retention bond. ## Sources 1. [What’s Wrong with Retention? (JCT explanation of the 2016 forms)](). The Joint Contracts Tribunal.