• Eastern firms hold an average of £966,000 in savings accounts
  • South West and Northern Irish companies most active business savers

Small and medium sized enterprises (SMEs) based in the East of England come top of the table when it comes to the amount of money held in business savings accounts, with the average balance standing at almost £1 million (£966,000), according to new research from specialist challenger bank Hampshire Trust Bank. Since the annual study was last conducted in 2015, SMEs in the East have overtaken London firms, which hold an average of £829,000 in savings, as the biggest business savers.

While businesses in the East of England and London have the largest savings pots, South West and Northern Irish SMEs are the most active savers – each investing 79% of total funds in business savings. The national average for business savings is £556,000 – 57% of a SME’s total funds.

Following the outcome of the EU Referendum, more than half (54%) of businesses in London said they were increasing the amount of cash in their firms to build a cash buffer, higher than the national average of 38%. This percentage of businesses building a cash buffer increases to 70% in the North East and 64% in the North West.

North of the border, 30% of Scottish SMEs said they were increasing cash reserves due to concerns about the UK economic outlook, closely followed by 29% of businesses in the East of England – significantly higher than the national average of 12%.

Business Savings Amounts by Region:

Region2016 Business Savings Account

(% of total funds)

2016 Current Account
East£966,000 (60%)£650,000
London£829,000 (54%)£697,000
North East£749,000 (57%)£556,000
South West£654,000 (79%)£178,000
Wales£628,000 (47%)£697,000
East Midlands£614,000 (59%)£433,000
Northern Ireland£501,000 (79%)£135,000
West Midlands£432,000 (36%)£755,000
North West£371,000 (50%)£368,000
Scotland£364,000 (74%)£125,000
Yorkshire and Humberside£316,000 (51%)£298,000
South East£132,000 (62%)£81,000
NATIONAL AVERAGE£556,000 (57%)£423,000 

Firms from the West Midlands and Wales invest significantly less than the national average in business savings accounts – 36% and 47% of total funds respectively, while the national average is 57%. When asked why they kept money in current accounts, 29% of West Midlands and Welsh SMEs said they are planning to keep money available to make a business investment in the near future – two of the top three regions making such plans – along with 36% of Northern Irish businesses.

Stuart Hulme, Director of Savings at Hampshire Trust Bank, said: “Our study demonstrates the regional differences in the amounts businesses are holding in current and savings accounts. It’s encouraging to see SMEs in the South West and Northern Ireland are confidently planning for their future, by placing the majority of their total funds into savings accounts.

“The SMEs that have been stockpiling cash into current accounts should consider the opportunities to make more out of every £1 earnt. At Hampshire Trust Bank, we continue to identify ways to meet the savings needs of our SMEs – the engine room of the UK economy. The benefit of making use of savings accounts is not only the interest rate return you get as a business, but also the knowledge that the money is being lent on to SMEs looking to grow, delivering double value and supporting investment in the UK.”

For more on Hampshire Trust Bank’s business savings accounts www.htb.co.uk/business-savings

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