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UK SMEs leave cash in current accounts, survey finds

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KAREN JOY BACUDO

Finance Editor

Some 64% of UK SMEs keep some or all of their cash reserves in current accounts, according to a survey of 400 senior financial decision-makers.

The main reason is a desire to maintain liquidity, cited by 40% of respondents. Lack of time was next at 27%, followed by perceived difficulty at 25%.

The figures point to a gap between businesses that actively manage surplus cash and those that leave money in accounts that typically pay little or no interest. Many firms appear to prioritise access to funds even when the cash is not needed for day-to-day operations.

Almost half of SMEs (47%) do not have a documented strategy to monitor, allocate, and optimise cash holdings. Of the 53% that do, only half include measures to protect cash, while the same proportion do not manage it under formal allocation rules.

This suggests that many smaller businesses manage reserves without a clear framework for balancing liquidity, protection, and income. The study described this as a performance gap in cash management across the sector.

“Finance leaders are under increasing pressure to do more with less and find performance in areas that may have been previously overlooked. One such place is cash reserves. Our research exposes how, while many SMEs rightly engage in cash management plans, there are several common opportunities to optimise these plans for even more positive impact,” said Lakhbir Sandhu, Chief Financial Officer at Flagstone.

Cash planning

The study also examined how businesses divide reserves between different uses. Nine in 10 SMEs said they segment their cash in some form, but the emphasis is on immediate operational needs.

Among those that segment cash, 70% hold funds for day-to-day activities such as payroll and routine expenses. By contrast, 55% keep a buffer for unexpected costs and urgent liquidity needs, while 48% set aside money for acquisitions, planned investment or other growth opportunities.

These figures suggest operational continuity remains the main driver of reserve planning. Longer-term uses for cash appear to receive less attention, even among businesses that already separate money into distinct pots.

“Whether by design or by accident, the lack of a formal, structured cash management strategy is likely to reduce visibility and limit opportunities to optimise returns,” Sandhu said.

He also pointed out how businesses classify reserves across short-, medium-, and long-term needs. The survey identified this as an area where firms could change how they hold money without giving up access to funds needed at short notice.

“Segmenting cash reserves by short, medium and long-term requirements can help businesses earn returns on their longer-term savings while maintaining liquidity for cash they frequently need. Passive cash managers may segment their cash too unevenly for safety. Cash is mainly allocated to keeping the business running smoothly, but that limits flexibility to manage risk or pursue growth opportunities,” Sandhu said.

Return trade-off

The report found that 64% of SMEs use current accounts to hold cash not needed for day-to-day operations. While 39% keep some cash in instant-access savings accounts, only 32% use fixed-term savings accounts and 24% use notice accounts.

This suggests many businesses still favour immediate access over yield, despite some fixed accounts with terms of one to three months offering rates above 4%. Cash left idle in non-interest-bearing accounts also loses value in real terms as inflation erodes purchasing power.

For finance teams, the issue is not simply where money is deposited, but how reserve policies are set and reviewed. Businesses without formal rules for cash allocation may be more likely to leave balances untouched in current accounts, even when some of that money could be moved into higher-return products with limited access restrictions.

The survey was conducted with the Centre for Economics and Business Research and Yonder Data Solutions. Flagstone said it oversees almost GBP £20 billion in assets under administration and is the UK’s largest savings platform by number of banks and savings accounts on its panel.

“There’s a clear opportunity for SMEs to balance earnings and access more strategically. Staggering cash across accounts that lock up funds for longer but offer better interest rates, alongside easy-access savings accounts that typically outperform current account alternatives, is one approach worth exploring,” said Sandhu.



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Oxford bus driver leads new mental health support group

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Rhys Smith, who has worked with the Oxford Bus Company since June 2024 and lives in Blackbird Leys, Oxford, launched the support group Men’s Minds with his brother Aaron in September.

The group, which now has 15 regular attendees, meets every other Friday for community sessions and every other Saturday for football meet-ups at Leys Pools and Leisure Centre.

Mr Smith said: “I’ve got a personal connection to this issue, as there’s a family history when it comes to mental health.

“The normal processes don’t always work, and people can struggle to get the right support.

“I wanted to start something new and different, and the reaction from family and friends was huge.

“I was posting videos on social media, and they were getting lots of shares and comments.”

The group has steadily grown through word-of-mouth and outreach, which has included putting up posters in gyms, shops and barbers around Blackbird Leys, an area Mr Smith knows well.

He said: “In Blackbird Leys and Greater Leys, the rates for self-harm are higher than anywhere else in Oxfordshire.

“I’ve lived in Blackbird Leys all my life and I know everyone here.

“We began putting posters, leaflets, and banners up in gyms, barbers, and shops, and it’s been growing since.”

Mr Smith said: “We’re all part of a brotherhood.

“There’s a WhatsApp group where we check-in and chat with each other.

“When we meet, we talk about our plans, we joke and laugh, and what we want to provide is something different to your average mental health group.

“I don’t want people sitting in a circle watching a screen.

“It’s about everyone talking and there being a togetherness.”

Recently, members of Men’s Minds climbed Snowdon together.

Mr Smith said: “It was an incredible experience, and I feel very fortunate to have completed it with the group of lads we went up with.

“It was by no means an easy task, but we all made it to the top.

“There were a few challenging moments along the way, however we supported one another throughout and remained committed to not leaving anyone behind.”

His efforts have been recognised by his employer.

Luke Marion, managing director of Oxford Bus Company, said: “We’re incredibly proud of Rhys for the way he is tackling one of society’s biggest issues.

“Mental health is something the business take very seriously, yet it’s a topic which we generally shy away from as a community.

“Rhys is a real credit to Oxford Bus Company as he continues to open conversations and seek positive change.”





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RHS appoints Yodel Mobile to boost Grow app downloads

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JOSEPH GABRIEL LAGONSIN

News Editor

App store push

The Royal Horticultural Society has appointed Yodel Mobile to support the expansion of its RHS Grow app in the charity’s first partnership with an app marketing agency.

The appointment is part of a wider effort to extend the RHS’s reach beyond its gardens and shows and draw more users to its digital services. Yodel Mobile will work to improve the app’s visibility in app stores through app store optimisation, helping the charity target younger gardeners, beginners and people across the UK who may not engage with its physical sites.

RHS Grow offers gardening guidance, inspiration and practical advice through a mobile app. The partnership reflects a broader push to make gardening more accessible wherever people live, as the RHS develops its digital strategy alongside its traditional work in horticulture, education and public gardens.

Founded in 1804, the RHS is the UK’s largest gardening charity, with more than 600,000 members. It shares horticultural advice through its gardens, events, education programmes, publications and website, while also running campaigns linked to sustainability and school gardening.

For Yodel Mobile, the agreement adds a well-known national institution to its client list. The consultancy, part of NP Digital, specialises in mobile app marketing and says it has worked on more than 2,500 apps since its founding in 2007, including for TUI, UKTV, Global Player and Hinge.

Charity digital shift

The partnership also signals a shift in how the RHS is approaching audience development. Long reliant on its gardens, flower shows and publishing to connect with the public, the charity is now placing greater emphasis on mobile products to reach new demographics, including urban users and younger people.

RHS strategy 2030

The app forms part of the RHS’s 2030 Strategy, which aims to widen access to gardening, support more sustainable practices and use science-based approaches to address issues affecting people and nature. Digitally, that means using online tools to reach audiences who may not see gardening as an established part of daily life.

One likely focus is discoverability. Competition in app stores is intense, and charities and membership organisations often face the same challenge as consumer brands in turning recognition into downloads and repeat use. By focusing on organic app store presence rather than paid promotion alone, the RHS appears to be seeking longer-term user growth.

Jamie Meza De Paz, App Marketing Manager at the RHS, outlined the thinking behind the appointment.

“RHS Grow is about opening up gardening to new audiences and showing that it’s for everyone, wherever they live,” said Jamie Meza De Paz, App Marketing Manager at the RHS.

“It’s also important that we extend the reach of the RHS beyond our gardens, helping more people connect with nature and experience the joy of gardening in their everyday lives. We were looking for a partner with a proven track record of delivering measurable results, and Yodel Mobile stood out immediately. Their expertise will help us reach more people and strengthen our app store presence, ensuring even more users can discover and enjoy the app,” said Meza De Paz.

The charity’s focus on younger and newer gardeners reflects a broader trend across the horticulture sector, where established institutions are trying to connect with audiences shaped by mobile-first habits, smaller living spaces and growing interest in urban and sustainable gardening. Apps have become one way to offer advice and build regular engagement without relying on visits to physical venues.

Yodel Mobile role

That creates an opening for specialist marketing firms focused on app discovery, retention and engagement. Yodel Mobile said its role will centre on strengthening the app’s organic position in app stores, which can influence both download volumes and how a product is perceived by prospective users.

Mick Rigby, Chief Executive Officer of Yodel Mobile, said the partnership would support the charity’s digital ambitions.

“We’re delighted to partner with the RHS, a national institution with such a strong legacy, to help unlock the full potential of the RHS Grow app,” said Mick Rigby, Chief Executive Officer of Yodel Mobile.

“This initiative will support the RHS’s vision of making gardening accessible for everyone, while strengthening its digital presence for the future,” said Rigby.

The RHS has also set out a separate sustainability strategy aimed at making the organisation net positive for nature and people by 2030. Alongside its Planet-Friendly Gardening campaign, the charity has encouraged UK gardeners to respond to climate and biodiversity pressures, adding another dimension to its effort to broaden participation in gardening through digital tools.



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Oxfordshire pub group named among best UK places to work

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Butcombe Group, which runs familiar favourite pubs in Oxfordshire including The Trout at Tadpole Bridge, The Victoria Arms in Old Marston and The Prince of Burford in Burford, has been recognised for its workplace culture.

The group was named for the second time in The Sunday Times Best Places to Work 2026 list, which highlights employers across the UK which excel in worker wellbeing and satisfaction.

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Cat Moseley, chief experience officer of Butcombe Group, said: “Being included in The Sunday Times Best Places to Work is something we’re incredibly proud of, particularly it being our second year in a row.

The Victoria Arms.The Victoria Arms, Old Marston (Image: Butcombe Brewing)

“It reflects the environment we have worked hard to create, one where team members feel supported, valued and able to thrive.

“Our teams are at the centre of everything we do, and we are constantly listening and responding to their feedback to improve their experience.

“To receive this recognition more than once is a real testament to their dedication and to the progress we continue to make as a business.”

The Trout at tadpole Bridge

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The company credited its success to its ongoing investment in people which has enabled it to attract and retain talent across its 118-pub estate, which employs 1,800 people.

Jonathan Lawson, CEO of Butcombe Group, added: “At the heart of our success is the dedication and collaboration shown by our people every day, whether they are welcoming guests, creating memorable moments, or supporting one another behind the scenes.

“In what continues to be a challenging environment for the hospitality sector, their commitment to delivering exceptional experiences for our customers continues to make a real difference.”





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