- IT and communications firms have an average savings balance of £843,000
- 5% increase in savings compared to levels on the run up to the EU Referendum
Small and medium sized enterprises (SMEs) in the IT and communications sector are top of the table when it comes to saving money in their business savings accounts with the average balance standing at £843,000, according to new research from specialist challenger bank Hampshire Trust Bank.
The annual study shows* IT and communications is the only sector to have grown business savings balances since the run up to the EU Referendum - increasing their savings pots by 5% and overtaking accountancy firms as the biggest savers. The national average for business savings is £446,000, a 20% drop compared to last year**.
When asked why they plan to increase the amount held in business savings accounts, 75% of IT and communications SMES said they were building a cash buffer, higher than the national average of 49%.
While IT and communications businesses have the largest savings pots, SMEs in the retail sector are the most active savers, investing 74% of total funds in business savings, higher than the national average of 52%. SMEs in the legal sector hold the lowest proportion of total funds in savings (38%).
Charities have decreased their business savings balances the most (-69%), followed by accountancy firms (-39%) and retail SMEs (-31%).
|Sector||2017 business savings account (% of total funds)||% change from 2016*||2017 current account|
|IT & communications||£843,000 (53%)||5% (2016: £804,000)||£760,000|
|Accountancy||£667,000 (64%)||-39% (2016: £1,085,000)||£369,000|
|Financial services||£555,000 (50%)||-19% (2016: £687,000)||£558,000|
|Architect||£533,000 (59%)||-25% (2016: £708,000)||£363,000|
|Manufacturing & engineering||£444,000 (49%)||-18% (2016: £543,000)||£458,000|
|Health and medical||£421,000 (47%)||-16% (2016: £504,000)||£466,000|
|Legal||£317,000 (38%)||-10% (2016: £354,000)||£508,000|
|Retail||£289,000 (74%)||-31% (2016: £418,000)||£102,000|
|Construction & building||£264,000 (48%)||-17% (2016: £319,000)||£289,000|
|Charities||£155,000 (52%)||-69% (2016: £497,000)||£145,000|
|Average|| £446,000 (52%)||-20% (2016: £556,000)||£409,000|
Stuart Hulme, Director of Savings at Hampshire Trust Bank, said: “Our research reveals the sector differences when it comes to the amount being put into savings accounts. It is encouraging to see that retail, accountancy and architect SMEs are confidently planning for the future by placing the majority of their total funds into savings. Given the current uncertain economic environment it is perhaps not surprising that charities have decreased their savings pots as they may be spending more on charitable causes, however, it is positive to see that in terms of the proportion of total funds being saved they are in line with the national average.
“Rather than stockpiling cash in current accounts, SMEs should consider the opportunities available to make the most out of their hard earned cash. It is important for businesses to shop around for a savings account that provides a better rate of return and helps them build for the future.”
Read more information on Hampshire Trust Bank’s Business Savings accounts.
About the research
Hampshire Trust Bank commissioned research in partnership with Coleman Parkes research agency. As part of the research, which took place in May 2017, Coleman Parkes conducted interviews with 500 SMEs, defined as businesses that have 250 employees or less.
Last year’s research, again conducted in partnership with Coleman Parkes, took place in August 2016 and also involved interviews with 500 SMEs.
** The average business savings account balance in 2016 was £556,000.