Get the payment schedule right and almost nothing else can go catastrophically wrong: if the builder folds, walks, or falls out with you, the damage is capped at days of work rather than months of money. Get it wrong — paying ahead of the work — and every other protection in the contract is fighting uphill.
The golden rule
The value of completed work on site should always slightly exceed the total you’ve paid. Not the other way round, not even for a week. This single discipline means that at any moment the deal could end and you could pay someone else to finish with the money still in your account. Builders call clients like this “safe”; insolvency practitioners call the others “creditors”.
A worked example: £80,000 rear extension
| Stage | Milestone | % | Cumulative |
|---|---|---|---|
| 1 | Foundations poured and inspected | 10% | 10% |
| 2 | Masonry to DPC, oversite complete | 10% | 20% |
| 3 | Walls to wallplate | 15% | 35% |
| 4 | Roof on, structure watertight | 15% | 50% |
| 5 | First fix (electrics, plumbing, joinery) | 12% | 62% |
| 6 | Plastering complete | 10% | 72% |
| 7 | Second fix complete | 12% | 84% |
| 8 | Decoration, floors, commissioning | 11% | 95% |
| 9 | Practical completion + snagging | 5% retention | 100% |
Adjust the shape to the job, keep the principles: no deposit-shaped stage 0 (see deposits), each stage tied to something you can stand in front of and see finished, and a meaningful final slice held for snagging.
Milestones, never dates
A schedule that pays “£8,000 on the 1st of each month” pays for time passing, not work done — the programme slips and the money doesn’t. Milestone triggers self-correct: slow job, slow money. This is also fairer to a fast builder, who gets paid sooner by finishing sooner.
Define each milestone unambiguously. “Roof complete” invites argument; “roof structure, covering, flashings and rainwater goods complete” doesn’t. On JCT forms the stages are written into the contract particulars; on a builder’s own paperwork, attach the table.
Valuing a stage before you pay
For most stages a 15-minute walk-round together is enough: is the milestone genuinely complete, including the fiddly ten percent? Photograph the state of work at each payment — it’s your evidence trail if anything later goes to dispute. On projects over ~£150k, or where the schedule is monthly valuations rather than milestones, paying a quantity surveyor a few hundred pounds per visit to certify valuations is money well spent — see when a QS is worth it.
Pay promptly once a stage is genuinely done — within 7 days, ideally faster. The moral authority to insist on quality comes partly from being the client who always pays on the nail.
When the builder pushes for more, sooner
Requests to bring money forward — “can you do stage 4 now, we’ve nearly finished stage 3” — are how sound schedules erode. A one-off with a reason (a big materials order landing) can be accommodated by paying for the materials on delivery, against invoice, not by advancing a labour stage. A pattern of pushing is your earliest, clearest signal of a business in cash trouble: tighten, don’t loosen. The contracts pillar covers the deposit and retention rules that pair with this guide.
This guide is general information for homeowners in England and Wales, not legal advice.
