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Slim Savings: How Much Money Do SME Businesses Save in the UK?

The current economic climate is making saving money increasingly difficult if it’s even possible at all. Inflation has sent costs for utility bills and household goods rocketing sky high, with interest rates at a 14-year high, which people up and down the country are trying to battle. Our personal finances will be taking a hit…

A graphic of a blue woman watering a money tree

The current economic climate is making saving money increasingly difficult if it’s even possible at all. Inflation has sent costs for utility bills and household goods rocketing sky high, with interest rates at a 14-year high, which people up and down the country are trying to battle.

Our personal finances will be taking a hit as a result, with the same also said for businesses who are trying to combat increasing costs, as well as declining revenue in some cases, as consumers tighten their purse strings. With reports suggesting that nearly 50 shops closed for good per day¹ in the UK last year, and more than 32 pubs closed per month², British businesses are having to put up a fight to carry on through these challenging times.

With this in mind, we wanted to find out what the financial landscape currently looks like for UK businesses, and how it’s affecting their ability to futureproof themselves for the years to come.

More than 1 in 6 UK businesses have £1,000 or less in savings

Interest rates are high, which is typically the ideal situation for savers – however, the reality of our high inflation and rising costs means that savings are out of the picture for many individuals and businesses alike. In a survey of over 500 leaders from UK SME businesses, more than 1 in 6 (17%) said they have £1,000 or less in savings, with 6% having no savings at all. That’s more than 330,000 UK businesses, that don’t have anything saved, to stay afloat during a downturn in custom.

Though this may seem more positive in comparison to personal finances, where it was recently revealed that more than a third (34%) of adults have no, or less than £1,000, of savings³, the nature of business means that owners are not only providing an income for themselves but are also supporting a number of employees financially.

However, for sole traders, whose business finances are very closely linked to their personal finances, this number was significantly higher with nearly a quarter (24%) having no savings to fall back on. Though a lack of any savings at all isn’t something that sole traders alone are facing; nearly 1 in 10 businesses with 1-9 employees (9%) and 10-49 employees (9%) are also looking at empty bank balances.

Half of all businesses save £1,000 or less per month

With more than 1 in 6 (17%) businesses currently having £1,000 or less in their savings accounts, we may assume that with the current climate, this is being topped up by only very small amounts, if any, each month – and we’d be correct. According to our survey, 1 in 10 (10%) SMEs are putting no money into their savings accounts each month, with almost half (49%) of all businesses saving less than £1,000 in the same period on average.

Small businesses are much less able to save than their larger counterparts, with 3 in 10 (31%) businesses with a turnover of less than £100,000 making no savings each month, and three quarters (75%) of sole traders saving less than £400, every 30 days – though a third of sole traders save nothing at all.

The picture is similar for a variety of industries, with more than two-fifths of tradespeople saving £1,000 or less per month, if at all, 1 in 10 (10%) accounting or finance businesses making no regular savings, and half (49%) of aesthetics and beauty businesses saving £1,000 or less.

Likewise, across the country businesses’ savings have been hit, with companies based in the East of England saving the least – as 67% said that they were saving £1,000 or less, including nothing at all.

In an ideal world, all businesses would be making regular savings to help strengthen their financial position. However, the reality is that this just isn’t possible at the moment with increased costs – but it is still important for businesses to be savvy about their finances and complete internal audits to see if there are any areas where they can squeeze out a few pounds, or if they can strengthen their financial position in other ways.

We spoke to business finance expert Connor Campbell from comparison site NerdWallet who has a few tips for how businesses can do this:

“Cutting costs without sacrificing quality is a balancing act. Whenever you look to make a saving, you should ask yourself whether it will materially impact the quality of your service or product. If it will, those savings may lead to greater losses down the line. However, there are a few areas that you can look at:

  1. Suppliers – If you are sourcing supplies, is there a cheaper version of the same product that will not harm the quality of your own offering? Or can you negotiate your deal with your existing suppliers, and see if they can bring their prices down?
  2. Utilities – Similarly, can you reduce the cost of your utilities? This could be finding a cheaper broadband provider, looking into energy-saving measures to reduce your electricity and gas usage, or even switching business energy suppliers entirely.
  3. Check your subscriptions usage – Are there any tools or services your business is paying for that you don’t use – or don’t use enough – that you can get rid of? Can you replace any of these services with cheaper versions, or even free alternatives?
  4. Don’t be afraid to raise your own costs – You may need to consider raising your own costs. If so, you need to find the sweet spot between increasing the price of an item or service enough that it allows you to save more, but without it alienating your customer base and driving people away.

“Where businesses have cut all the costs they can, the most important thing is to then minimise exposure to risk. For example, locking in contracts for longer periods of time is one way of doing this – if businesses can afford their outgoings at present, ensuring those prices don’t change for the foreseeable future is an effective way to strengthen their financial position.”

Half of all UK SMEs would fold within 3 months if they lost their income

Savings are something that will help to protect us in a financial emergency and weather periods when revenue is down, or costs are particularly high – ultimately, having a cushion of savings buys more time when things get tough.

For businesses, Connor suggests a two-step approach to achieve this: “Businesses should set aside a portion of their earnings for an emergency fund to cover any short-term cash flow issues. Ideally, this should cover the essentials such as rent, bills and payroll, for around 3-6 months. If you don’t have this in place, you should try to top it up as soon as possible. Secondly, business finances should be structured to allow a cash buffer to build up over time.”

However, with savings proving to be a huge challenge currently, this is likely to be an area where businesses are struggling, particularly if they dipped into this emergency fund during 2020.

The COVID-19 pandemic showed us the importance of these emergency funds, as the world changed overnight, plunging businesses into completely unknown territory out of the blue – with many relying on savings until they found their footing in the new world they were faced with. Three years on from the first lockdown, we asked businesses how long they thought they’d manage to stay afloat using their savings, if they lost all revenue overnight in the current climate – 6% said that they thought they’d go out of business straight away.

Across all industries, the average length of time that businesses thought they could manage for is just under 6 months – which isn’t long at all in the big picture, though around half thought they’d be able to manage for no longer than three months. Though, considering the advice around emergency funds, this does suggest that businesses have made significant efforts to put this savings strategy into practice.

With sole traders struggling to save any money at all in some cases, it’s perhaps unsurprising that they are most likely to go out of business overnight, with a fifth (19%) unable to survive an immediate loss of income. For nearly 3 in 5 (57%) of businesses with 10-49 employees, who all themselves rely on their jobs for income, savings would be able to sustain them for three months at the most, unless they found a way to generate fresh income.

Although we may see accounting and financial services businesses as the answer to our financial woes, they aren’t immune to the turbulent economy either – almost a third (31%) said they’d only be able to manage for two months with no income, while 8% would go out of business immediately.

Half of businesses are saving significantly less money than three years ago

It’s no secret that the past three years have been incredibly difficult financially – with the COVID-19 pandemic requiring businesses to find new ways to function with lockdown restrictions, reduced revenue in many cases and relying on furlough and other initiatives to help keep them afloat. Then more recently, rising bills and costs have only added to the turbulence. Despite this, some businesses were lucky enough to find themselves growing at an incredible rate during this period, as consumers turned more than ever to online businesses and adopted new behaviours – which may well be the case for the third of businesses who said that they’ve been able to save significantly more money over the past three years.

However, for nearly half (45%) of all businesses, their ability to save has been significantly impaired – with sole traders again, hit even harder with two thirds now saving much less. This is true of businesses in a range of sectors too, with almost half (46%) of trades and construction businesses, a third (33%) of accounting and finance businesses, 2 in 5 (40%) legal businesses and more than a third (37%) of aesthetics/beauty businesses seeing much lower levels of savings now vs pre-2020.

Regionally, businesses in most parts of the UK are seeing a significant decline in their saving ability, but those in the South West have been hit the hardest, with almost two-thirds (60%) of South Western businesses slashing their savings. Scottish businesses follow (55%), with the East Midlands marginally behind (51%) as the region with the third highest level of savings restricted businesses.

On the other hand, the same can be said of just 3 in 10 (29%) Leeds-based businesses, with more than half (54%) of businesses in the city saying that their ability to save has significantly increased.

1 in 10 businesses aren’t confident they’ll be afloat in 6 months’ time

As mentioned, savings are essential for any business as they’ll help them to ride the waves of whatever comes their way and provide a buffer to lean on. Though with many businesses struggling to save at all, and being left in more precarious financial positions, they won’t have this buffer to rely on. Looking towards the future, given the financial difficulties that they’re currently facing, 1 in 10 (10%) businesses aren’t confident that they’ll still be operating in six months’ time – this is even higher for smaller businesses, with 15% of those with an annual turnover of under £100,000 feeling very uncertain about their futures. Again, sole traders are also very sceptical of the future, with more than 1 in 6 (17%) looking at the prospect of closing their books for good before 2023 is over.

The picture is looking equally concerning as we look towards 2024, with 1 in 7 (13%) businesses unsure that they’ll be afloat by next January. This trend of uncertainty doesn’t look set to give up either, with a quarter (24%) of businesses uncertain that they’ll still be running in a longer-term 3-5 year outlook.

Although, if the last three years have shown us anything, it’s that we can never predict what the future will bring and that there are many ways to weather the storm, one of which is ensuring that you continue to market your business well, to bring in new and repeat custom.

Although it may seem counter-productive when times are tough, it’s important to continue to spend on marketing during economic downturns – not only will it help to generate leads and bring in much-needed custom, but it will also help to strengthen brand awareness for when customers are ready to spend again.

If you’re not sure how to adapt your marketing to the current climate, take a look at some of the advice in our Knowledge Centre or get in touch to see how we can help you.


We partnered with Censuswide to survey 503 UK SME owners/managers, asking them a range of questions about the amount their business has in savings, how their ability to save has changed and how they feel about the future.

Responses were analysed nationally, as well as by industry sector, region, number of employees and business turnover. Those with under 30 respondents (eg. business owners based in the North East, Wales and Northern Ireland) were omitted from any regional/sector-specific breakdowns.

Survey conducted in February 2023.


  1. The Guardian, January 2023
  2. City AM, December 2022