The average is £446,000, compared to £556,000 in 2016, although companies in most industry sectors still hold the majority of their funds in savings accounts, compared to current accounts.

Every industry sector has seen SMEs reducing their savings pot except IT and communications, where funds grew 5% compared to 2016.

SMEs in the IT and communications sector are top of the table when it comes to saving money in their business savings accounts with the average balance standing at £843,000.

When asked why they plan to increase the amount held in business savings accounts, 75% of IT and communications SMES said they were building a cash buffer, higher than the national average of 49%.

While IT and communications businesses have the largest savings pots, SMEs in the retail sector are the most active savers, investing 74% of total funds in business savings, higher than the national average of 52%. SMEs in the legal sector hold the lowest proportion of total funds in savings (38%).

Charities have decreased their business savings balances the most (-69%), followed by accountancy firms (-39%) and retail SMEs (-31%). &

Stuart Hulme, director of savings at Hampshire Trust Bank, said: “It is encouraging to see that retail, accountancy and architect SMEs are confidently planning for the future by placing the majority of their total funds into savings.

“Given the current uncertain economic environment it is perhaps not surprising that charities have decreased their savings pots as they may be spending more on charitable causes, however, it is positive to see that in terms of the proportion of total funds being saved they are in line with the national average.

“Rather than stockpiling cash in current accounts, SMEs should consider the opportunities available to make the most out of their hard-earned cash. It is important for businesses to shop around for a savings account that provides a better rate of return and helps them build for the future.”

Hampshire Trust Bank commissioned the analysis in partnership with Coleman Parkes research agency.

As part of the research, which took place in May 2017, Coleman Parkes conducted interviews with 500 SEs, defined as businesses that have 250 employees or less.

Business savings by industry sector

Sector

2017 business

savings account

(% of total funds)

% change from 2016*2017 current account

IT &

communications

£843,000

(53%)

5% (2016: £804,000)  £760,000
Accountancy

£667,000

(64%)

-39% (2016: £1,085,000)  £369,000

Financial

services

£555,000

(50%)

-19% (2016: £687,000)  £558,000
Architect

£533,000

(59%)

-25% (2016: £708,000)  £363,000

Manufacturing

& engineering

£444,000

(49%)

-18% (2016: £543,000)  £458,000

Health and

medical

£421,000

(47%)

-16% (2016: £504,000)  £466,000
Legal

£317,000

(38%)

-10% (2016: £354,000)  £508,000
Retail

£289,000

(74%)

-31% (2016: £418,000)  £102,000

Construction

& building

£264,000

(48%)

-17% (2016: £319,000)  £289,000
Charities

£155,000

(52%)

-69% (2016: £497,000)  £145,000
AVERAGE

£446,000

(52%)

-20% (2016: £556,000)  £409,000