Can you avoid a deposit by buying the materials yourself?

Often, yes. If the deposit is meant to cover materials, you can buy the larger items yourself and pay the supplier directly, so you own them whatever happens to the builder. Citizens Advice suggests exactly this as an alternative to handing over a deposit. It also keeps your money attached to something real, rather than sitting in the builder's account.

Is a builder's deposit refundable if you change your mind or the job falls through?

It depends entirely on what you agreed in writing, which is why the terms matter before you pay anything. A deposit that only covered materials already ordered may not come back, because that money has been spent on your behalf. Agree in writing what happens to the deposit if either side pulls out, and keep the receipt.

How much should be held back as retention, and for how long?

On building contracts the retention, a slice of each payment held back as security, is commonly around 5%. It usually halves to about 2.5% once the work reaches practical completion, the point at which it is finished and usable. The remainder is released after a rectification period, often about twelve months, during which the builder must come back to fix any defects that show up.

Should you use an escrow account or an insurance-backed guarantee?

For larger sums these are worth asking about. An escrow account, where money is held by an independent third party and released only when agreed conditions are met, keeps your payment out of the builder's hands until the work is done. Use an FCA-registered provider. An insurance-backed guarantee covers you if the builder fails and cannot honour their work. Both are voluntary, so you have to arrange them yourself.

What happens to your deposit if the builder goes bust?

If a builder becomes insolvent, you usually rank as an unsecured creditor, someone owed money with no security over the firm's assets. That puts you near the back of the queue when whatever is left is shared out, so money paid ahead of the work may not come back. This is the strongest reason to keep payments tracking the work, and to put a deposit on a credit card, where section 75 can make the card provider liable instead.

How Much Deposit Should You Pay a Builder?

Is there a standard deposit for building work?

No UK consumer or trade body sets a standard deposit percentage. The rule is a principle, not a number.

Keep any deposit small and tied to the materials the builder must buy upfront. Pay for the rest as the work is done.

Citizens Advice says, for a long job, never agree to more than a quarter, and to push it lower or avoid a deposit altogether.

Paying a deposit by credit card brings section 75 protection, for amounts over £100 and up to £30,000. The contract and staged payments protect the rest.

On a £150k to £1m project the answer is structure: little or no deposit, payments certified against work done, and a small retention held back.

No. No UK consumer body or trade association sets a standard deposit figure for building work. If someone quotes you a typical percentage, they are repeating a habit, not a rule.

A deposit is a payment you make before the work starts. It should be small, and it should be tied to a genuine upfront cost, which in practice means the materials the builder has to buy before they can begin.

There is one firm number worth knowing, and it is a ceiling, not a target. Citizens Advice says that for a job that will take a long time, you should not agree to pay more than a quarter of the total as a deposit, and that you should push it as low as you can, or avoid a deposit altogether. Read that as a maximum to stay under, not an amount to aim for. The right deposit is often far smaller, and sometimes nothing at all. The honest figure depends on what the builder genuinely has to buy before starting, which is a real cost you can ask to see.

Why a builder asks for a deposit

The legitimate reason is narrow. A deposit covers materials the builder has to order and pay for before they can start, and sometimes it holds your slot in their schedule. That is it.

The Federation of Master Builders, a national trade body for builders, makes the same point in plain terms. You should never pay the whole cost upfront. A deposit may be requested to cover materials. And any deposit you do pay should be recorded in writing.

So a deposit is for the builder's real upfront outlay, not for labour that has not happened yet. If a builder asks for a large sum before lifting a tool, they are asking you to fund the job in advance, which is a different thing entirely. The size of the request tells you which one it is. A reasonable deposit reflects an order the builder can show you, such as a joinery or window order, not a round number taken from the contract total.

The rule that actually matters, your money should follow the work

Here is the part that matters more than the deposit. Your protection is not the size of any single payment. It is the shape of the whole payment plan.

The safe shape is to pay in stages. Stage payments, also called interim payments, mean paying for work as it is finished and valued, not before. Done that way, you are never far ahead of the builder. You have paid for what is already on the wall, and no more.

Citizens Advice puts it plainly: pay in stages, and do not agree to pay everything upfront. The logic is simple. A large deposit, or a schedule that pays ahead of the work, quietly moves the risk onto you. If the work is not delivered, the money you have paid ahead is the money at stake.

This is why a proper cost plan and a clear stage schedule matter more than haggling over the deposit. Get the shape of the payments right, and the deposit becomes a small detail rather than the thing protecting you.

What the law gives you

The law does give you something, and it is worth knowing exactly what. Building work is two things at once: a service, which is the labour, and a supply of goods, which is the materials. So two sets of rights apply under the Consumer Rights Act 2015, the law that sets out your rights when you buy goods and services.

The labour must be carried out with reasonable care and skill, within a reasonable time, and for a reasonable price where you did not fix one in advance. The materials must be of satisfactory quality, fit for their purpose, and as described. If the work falls short on any of these, you can require the builder to put it right, or get some money back. For the labour, the law usually expects the builder to be given the chance to put the work right first, with a reduction in price if that is not done properly. These rights cannot be signed away in a contract.

Then there is the gap, and it is the important one for a deposit. There is no government scheme that protects a building-work deposit. Compare a tenancy: by law, a tenant's deposit must be placed in a government-approved scheme. A building-work deposit has no such safety net. So the protection you actually have is the contract you sign and the way you pay, not a scheme standing behind your money.

Paying by card, the section 75 safety net

How you pay the deposit changes how protected it is. If you pay by credit card, and the cash price of what you are buying is over £100 and not more than £30,000, section 75 of the Consumer Credit Act 1974 makes the card provider equally responsible alongside the builder. A deposit put on a credit card is protected, and the claim still stands even if the builder stops trading.

A debit card does not give you this. It has a separate and weaker route called chargeback, which is a card-scheme rule rather than a legal right, and is usually claimed within about 120 days. It is useful, but it is not the same protection.

There is a catch on a larger project. That £30,000 ceiling means section 75 can only ever cover a deposit, or an early stage payment, never a £150,000 to £1,000,000 job in full. Treat it as a backstop on the deposit, not as cover for the whole build.

What a payment plan looks like on a larger renovation

For a £150,000 to £1,000,000 renovation, the answer to the deposit question is a structure, not a percentage.

The best-practice shape is this. Little or no deposit. Then payments released against work that has been valued as complete, usually every few weeks. And a small amount held back, called retention, until the job is signed off, so there is something to cover any faults found at the end.

What makes this work is independent valuation. On a properly run project, an independent professional values what has been done and certifies each payment. That person is usually a quantity surveyor, who values the work, or a contract administrator, who runs the contract and certifies payment. Because they certify against work actually completed, your money is released for what is finished, not for what is promised. It also protects both sides. The builder is paid promptly for completed work, and you never pay for work that is not there. Any deposit sits at the front of that structure, and it stays small.

This is the standard that bodies like RICS and JCT describe for substantial residential work. It is not a London-only rule, and it is not reserved for large budgets. It is simply how a serious project is paid for. A clear contract, such as a JCT Minor Works contract, sets this out, and it is worth understanding what a fixed price does and does not hold before you sign. If you want a clear view of what a renovation actually costs, that is the next thing to read.

Warning signs, and how to protect your money

Some requests are a warning in themselves. Be wary of a builder who wants the whole cost upfront, asks for a large deposit, will only take cash, or will not put things in writing. Citizens Advice specifically names cash-only traders and those who want paying in full upfront as ones to avoid.

The practical steps are straightforward. Get a written contract before any work or payment, and a receipt for anything you hand over. Pay by card rather than cash, so there is a record and, on a credit card, the section 75 protection. Agree in writing exactly what any deposit covers, and when each stage payment falls due. And check the builder's references, any trade accreditation, and their insurance before money changes hands.

None of this is difficult. It is the difference between a paper trail that protects you and a handshake that does not.

The honest model

The construction industry has normalised front-loaded payments and large deposits, the kind that leave the homeowner carrying the risk. Too much of the trade, Myrmex included, has been comfortable asking clients to pay ahead of the work rather than alongside it.

The honest model is the opposite. Payment that tracks completed work, valued and certified independently. A deposit kept to what the materials genuinely cost, and no more. This is general consumer information, not financial or legal advice, so read your contract and take advice before you pay. But the principle holds whatever your project: keep the deposit small, tie it to the materials, and let your money follow the work.

How much deposit should you pay a builder?