SMEs holding on to cash
New analysis shows that the UK’s small businesses are missing out on thousands of pounds of interest payments by refusing to move huge cash piles from current accounts to savings accounts. Hampshire Trust Bank analysed the accounts of 500 SMEs and found that the average small firm has an account balance of £230,000, as businesses hold on to capital in case of economic shocks. Firms with fewer than 10 employees keep an average of £44,000 in their current accounts, while companies with between 100 and 240 staff hold more than £420,000. The ratio of current account balances to savings balances stands at £1 to £1.17. Just a quarter of the small business owners surveyed said they felt confident enough to put cash into a savings product for a year, with 56% citing the need for greater cash buffers and 26% claiming that the volatility of the economy was a cause for concern say Harris & Co chartered accountants Northampton.