"Over three million businesses could be missing out on additional income that would be an added boost when dealing with the multiple financial pressures of running a business"
62% of SMEs in Britain, the equivalent of three million businesses, are not earning any interest on their business savings, Aldermore research shows.
Aldermore says financial pressures are the main reason for this, with 40% of those not earning interest not saving a sufficient amount on a monthly basis, and a third exhausting their savings before they can gain any interest.
The current low interest rate environment is an additional concern as 19% believe their bank does not offer high enough rates for noticeable interest to be earned.
For those businesses who are earning interest on savings, the majority (53%) are earning less than £300 annually, with the highest proportion (26%) earning less than £100.
When exploring business savings habits among the self-employed and SMEs, 65% hold a business account with the same provider as their private savings, regardless of the rate offered.
Ewan Edwards, head of savings at Aldermore, said: “Being a business owner comes with a whole host of challenges, so it is vital that business owners make their surplus cash work harder to provide additional financial support and to strengthen financial resilience. Our research shows over three fifths (62%) of SMEs are not earning any interest, meaning over three million businesses could be missing out on additional income that would be an added boost when dealing with the multiple financial pressures of running a business; such as cash flow.
“In addition, the research reveals that almost two thirds (65%) of business owners adopt the habit of having a business and personal savings account with the same provider. While this may appear to be the ‘easiest’ option, taking this approach means businesses are missing out on a number of good products on the market. We encourage all business owners to shop around to find the best account on offer, as this can make a positive difference in the long term.”