Research conducted by specialist challenger bank Hampshire Trust suggests that UK SMEs are holding, on average, £556,000 in current accounts. This figure is growing and it’s primarily due to economic uncertainty.
In London and the East of England, deposits held in business savings accounts was an average £900,000. Businesses had been increasing savings prior to the EU Referendum and more than half of London firms said they would continue to build cash reserves after the Brexit vote, in order to create a financial buffer or to save for a future business investment.
UK charities also find security in savings accounts. Cash levels amongst the top 5,000 charities is an average of £3.1m and, UK charities in general are holding an average of just under
half a million pounds in savings. Like other groups, charities are suffering from the current interest rate environment and could do much more to reduce bank risk and significantly improve the returns on their cash savings.
With an average cash holding of around £900,000, even with today’s low interest rate environment, businesses and charities alike could be missing out on anywhere between £8,000 and £10,000 in annual interest if savings deposits are not actively managed. This can be efficiently achieved and provides the added benefit of enhanced security via bank diversification or the FSCS.
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