UK businesses clutch their cash ahead of Brexit
In its third annual SME Savings Tracker of over 500 UK businesses HTB has found that in the current climate of Brexit uncertainty, cash is most definitely king as UK business savings accounts take a dip and cash is kept close at hand ahead of 31st October.
Business savings balances have continued to decline over the last two years as SMEs look to pay down loans and invest in the future amid Brexit uncertainty. On average, UK SMEs have £429,000 in their business savings account. However, in contrast to the 2017 data, the average amount held in business current accounts is up with an average current account balance of £726,000, a staggering 78% increase, reflecting a desire to have better cash balances with a large amount of economic uncertainty.
There has been a rise in concerns and uncertainty impacting the intention to increase saving balances; which is likely due to the uncertainties surrounding Brexit. Other key findings include:
54% of SMEs are concerned about interest rates on borrowing increasing
43% are concerned around the uncertainty of whether borrowing facilities will continue
For every £1 held in savings, there is another £1.69 held in a current account, a 60 pence increase on 2017
37% specifically raised an issue about the impact of Brexit on the short-term economic outlook.
Region | 2019 Business Savings Account (% of total funds) | % change from 2017 | 2019 Current account |
East Midlands | £810,795 (38%) | £670,000 (+21%) | £1,300,680 |
Scotland | £760,781 (32%) | £220,000 (+246%) | £1,611,380 |
London | £698,629 (40%) | £608,000 (-1%) | £881,450 |
West Midlands | £555,532 (36%) | £386,000 (+44%) | £988,380 |
South East | £383,030 (43%) | £93,000 (+314%) | £511,480 |
South West | £362,436 (43%) | £623,000 (-42%) | £489,520 |
North West | £325,114 (34%) | £286,000 (+14%) | £617,260 |
Northern Ireland | 302,200 (38%) | £432,000 (-30%) | £501,300 |
Wales | £182,500 (29%) | £503,000 (-64%) | £450,000 |
North East | £175,193 (47%) | £598,000 (-71%) | £193,860 |
Yorkshire & Humberside | £170,714 (43%) | £292,000 (-41%) | £226,600 |
East | £138,478 (40%) | £707,000 (-80%) | £211,000 |
AVERAGE | £429,388 (37%) | £446,000 (-17%) | £726,130 |
Stuart Hulme, director of savings and marketing at HTB said: “SMEs fuel the British economy, so it is important that they are supported. This research builds on that communication and identifies some of the wider market trends and recent developments that may impact SMEs. At HTB we prioritise relationships, our specialist teams are in regular communication with customers to gain an understanding of their requirements so we can best serve them, which, in turn, will support UK economic growth.
“Our range of award-winning business and personal savings accounts are a great alternative to keeping cash in a current account. Offering consistently great rates, we offer fixed and variable rate savings accounts to give customers a range of options to best suit their savings ambitions. And because we are a UK bank supporting UK businesses, you can be sure that your money is helping to boost the British economy.”
