Half of SMEs changing business savings habits due to pandemic

COVID-19 has caused 51% of SME decision makers to change their business savings habits, according to new research from Aldermore bank.

The retail bank suggested that while SME decision makers are “more motivated” to prioritise business savings, the immediate financial pressures from the pandemic are causing challenges in putting that into practice.

The study revealed that changing habits were more evident among larger sized SMEs, with 77% of SMEs with 50 to 99 employees citing a change in savings habits, compared to 43% of SMEs with 1 to 2 employees.

One in five (21%) SMEs said they would be immediately increasing the amount being put away in their business savings account, while the same proportion (20%) are committing to putting the same amount away.

However, the study, based on nationally representative sample of 1,006 senior decision makers in UK SMEs, also found that 7% of SMEs said it is likely they will only be able to put away less going forward.

Aldermore also suggested that the pandemic has motivated SMEs to become savers where previously they had not been, with one in 10 (11%) opening a savings account due to the impact that lockdown has had on their business.

“Although the economy has started to open up, the COVID-19 pandemic continues to have a profound impact on the SME community,” said Aldermore director of savings, Ewan Edwards.

“At the start of the pandemic, many businesses were caught out by the financial impact of lockdown and are now realising just how useful business savings can be as a buffer against the current uncertain situation.

“It’s encouraging to see that SMEs are becoming more aware of what they need for them to thrive and survive and are adjusting their business savings habits as a result. Businesses, particularly in some of the worst impacted sectors, should consider business savings accounts to add security and provide a financial buffer against any future shocks.”

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