Scottish SMEs losing out on nearly £370 million a year in ‘missing interest’, new research finds

The analysis reveals that the ‘big six’ high street banks offer an average interest rate of 1.45% on small business savings, down from 1.59% earlier in the year. Beyond the big six however, rates of up to 4.33% are available from challenger banks, a figure nearly three times higher than the big six.

For SMEs with an average £75,000 in savings, the discrepancy between big six interest rates and what’s available elsewhere is equivalent to £2,157 per year. With 170,650 SMEs across Scotland, this equates to a whopping loss of £368,092,050 for Scotland’s economy. For established SMEs with larger deposits of savings, the annual figure lost could be much higher.

The big banks are under-serving SME customers despite SMEs being the back-bone of the economy and supporting high-streets, job creation, investment and livelihoods across Scotland. Nationally, SMEs account for around 61% of all UK employment, and around a quarter of GDP.

Steven Smillie, Allica Bank's Relationship Manager for Scotland

The latest figures come off the back of research produced last year by Allica which revealed that SMEs are losing more than £7.5 billion per annum in ‘missing’ savings interest per year.

Commenting, Steven Smilie, Scotland Relationship Manager at Allica Bank said:

“Scotland’s SME economy is Scotland’s real economy, accounting for 170,650 businesses. These businesses are the life and soul of communities across Scotland and the difference between boarded up shops and vibrant high-streets.

“Despite this, SMEs aren’t getting the returns they deserve from high-street banks with interest rates that are consistently lower than are offered to bigger businesses. This lost income could represent a significant boost to the Scottish economy and be put toward investment, employment and a better deal for employees.

“The high-street banks are taking SME customers for granted, and those customers should shop around and get the return on their savings that they deserve.”

Which region is losing most in lost interest?

Region	No of SMEs (1-250 employees)	Lost interest (based on average SME savings of £75,000)
North East	72,235	£155,810,895
North West	265,840	£573,416,880
Yorkshire & The Humber	191,520	£413,108,640
East Mids	182,760	£394,213,320
West Mids	216,940	£467,939,580
East of England	268,605	£579,380,985
London	523,555	£1,129,308,135
South East	403,225	£869,756,325
South West	235,820	£508,663,740
Scotland	170,650	£368,092,050
Northern Ireland	77,930	£168,095,010
Wales	106,840	£230,453,880