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

Watch more of our videos on Shots! 
and live on Freeview channel 276
Visit Shots! now
New research from Allica Bank reveals that small and medium sized businesses (SMEs) across Scotland are losing out on more than £370 million annually as a result of not shopping around for better interest rates on their business savings.

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.

Hide Ad
Hide Ad

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 ScotlandSteven Smillie, Allica Bank's Relationship Manager for Scotland
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.

Hide Ad
Hide Ad

“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

Related topics:

Comment Guidelines

National World encourages reader discussion on our stories. User feedback, insights and back-and-forth exchanges add a rich layer of context to reporting. Please review our Community Guidelines before commenting.