Turns out that despite previous hype about adding simply organic matter to soil, this alone has not proven to be a viable water retention soil additive. Although organic matter is very important to soil health, nutrients and pH balance it cannot be said to improve water holding capacity.
Organic matter can have a marginal effect on sandy soils, but even less of an effect on clay based soils. This means other additives are required to truly increase the water holding capacity of either type of soil.
Alternatively clinoptilolite zeolite has been proven to retain up to 60% of its weight in water, and can hold on to it for longer periods of time than perlite, vermiculite and volcanic rock. Adding zeolite to soil at 10 – 15% by volume can increase water holding capacity, and does not deteriorate or break down over time.