Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Business

SME savings suffer following Brexit vote

SME savings suffer following Brexit vote
  • UK SMEs have an average savings balance of £446,000
  • 20% drop in savings compared to levels on run up to EU Referendum in 2016*
  • For every £1 held in a business current account there is £1.09 in a savings account 

29 June 2017 –  Small and medium sized enterprises (SMEs) are saving 20% less than in the run up to the EU Referendum in 2016*, with the average balance now standing at £446,000, according to new research from specialist challenger bank Hampshire Trust Bank.

The annual study shows that current accounts are also impacted with the average balance standing at £409,000, a 3% drop compared to levels in 2016**. This means that on average for every £1 in a current account that an SME holds there is another £1.09 in a savings account, a decrease on the £1.31 held in savings in 2016.

In the next 12 months, 56% said they intended to leave the amount of money in business savings as the same, 30% said they intended to increase the amount, while 14% said they intended to decrease their savings pot.

Of those that said they intend to increase the amount in their business savings, 27% said they wanted to do so because they were concerned about the impact of Brexit while a quarter (25%) were concerned about the long-term economic outlook. This compares to the 8% and 4% that had concerns about the short-term and long-term economic outlook respectively in 2016.

Concern about the long-term economic outlook was cited as the main reason, by 35% of SMEs, as to why they intend to decrease the amount in savings accounts in the next year.

However, despite the uncertain economic and political environment, firms are still identifying opportunities for growth. According to the research, a third (34%) of those increasing the amount in savings accounts said they were accruing cash to save for a major purchase, compared to 17% last year.

When asked what they would use the return from their savings for, the majority (28%) said they would invest in business infrastructure, while a quarter (25%) said they would use the money for research and development.

Stuart Hulme, Director of Savings at Hampshire Trust Bank, said: “While we are continuing to see growth across our business savings portfolio, the outcome of the EU Referendum and the current uncertain economic and political environment is clearly having an impact on SME savings balances and habits. We believe that at times like this it is important for businesses to remain focused on making more of their hard-earned cash and it is positive to see that UK SMEs are continuing to plan for the future.

“Savings can provide a cushion in times of potential financial bumps in the road, with nearly half (49%) of the smaller businesses we surveyed saying they chose to lock money away to build a cash buffer. Firms should feel reassured that by shopping around they can identify accounts which provide them with a wide range of terms and competitive rates of interest, in most instances higher than that which would be earned in a current account.”

The study revealed that SMEs are willing to tie up their savings for an average of eight months, one month less than in 2016. Hampshire Trust Bank offers a range of savings products from a 90 Day Variable Rate Business Notice Account to a 5 Year Fixed Rate Business Bond.

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post