SME business savings have fallen overall according to a recent study, however some sectors have seen savings increase.
Ahead of economic uncertainty and news that house price growth is stalling around the UK, it is perhaps surprising to hear that businesses are putting away less in business savings accounts.
Compared to last year, SME businesses are putting away 20% less over all according to research from the Hampshire Trust Bank. The average amount held in savings accounts by SMEs is currently £446,000 which is some way below the £556,000 recorded in 2016.
So is it a case of businesses digging into their savings more this year? There was nothing highlighted to suggest this was the case and in the IT and communications sector the opposite was true and firms were putting more away in savings with an increase of 5% overall on 2016. This was however the exception with charities and accountancy firms having 39% and 69% less held in savings respectively.
IT firms were said to be building average cash buffers of £843,000 putting among the biggest savers of all SME businesses.
The study indicates the need for business owners to understand the importance of protecting their businesses against economic uncertainty but it is also important to ensure that the best returns are made on those savings by shopping around for the best rates.