Many studies on drought consider precipitation and potential evapotranspiration (PET) impacts. However, catchment water retention is a factor affecting the interception of precipitation and slowing down runoff which also plays a critical role in determining the risks of hydrological drought. The Budyko framework links retention to the partitioning of precipitation into runoff or evapotranspiration. Applied worldwide, we demonstrate that retention changes are the dominant contribution to measured runoff changes in 21 of 33 major catchments. Similarly, assessing climate simulations for the historical period suggests that models substantially underestimate observed runoff changes due to unrepresented water management processes. Climate models show that water retention (without direct water management) generally decreases by the end of the 21st century, except in dry central Asia and northwestern China. Such decreases raise runoff, mainly driven by precipitation intensity increases (RCP4.5 scenario) and additionally by CO2-induced stomata closure (RCP8.5). This mitigates runoff deficits (generally from raised PET under warming) by increasing global mean runoff from −2.77 mm yr−1 to +3.81 mm yr−1 (RCP4.5), and −6.98 mm yr−1 to +5.11 mm yr−1 (RCP8.5).