The East of England has come out on the top of the leader board when it comes to the amount of money held in small business savings accounts.

The average balance for Small and medium sized enterprises (SMEs) in the east stands at almost £1 million (£966,000), according to new research by Hampshire Trust Bank.

Since the annual study was last conducted in 2015, SMEs in the East have overtaken London firms, which hold an average of £829,000 in savings, as the biggest business savers.

While businesses in the East of England and London have the largest savings pots, South West and Northern Irish SMEs are the most active savers, each investing 79% of total funds in business savings.

The national average for business savings is £556,000, equivalent to 57% of a SME’s total funds.

Stuart Hulme, director of savings at Hampshire Trust Bank, said: “It’s encouraging to see SMEs in the South West and Northern Ireland are confidently planning for their future, by placing the majority of their total funds into savings accounts.

“The SMEs that have been stockpiling cash into current accounts should consider the opportunities to make more out of every £1 earnt.”

Following the outcome of the EU Referendum, more than half (54%) of businesses in London said they were increasing the amount of cash in their firms to build a cash buffer, higher than the national average of 38%.

Business Savings Amounts by Region

The percentage of businesses building a cash buffer increases to 70% in the North East and 64% in the North West.

North of the border, 30% of Scottish SMEs said they were increasing cash reserves due to concerns about the UK economic outlook, closely followed by 29% of businesses in the East of England, which is significantly higher than the national average of 12%.

Firms from the West Midlands and Wales invest significantly less than the national average in business savings accounts, 36% and 47% of total funds respectively, while the national average is 57%.

When asked why they kept money in current accounts, 29% of West Midlands and Welsh SMEs said they are planning to keep money available to make a business investment in the near future, two of the top three regions making such plans, along with 36% of Northern Irish businesses.

Mr Hulme added: “The benefit of making use of savings accounts is not only the interest rate return you get as a business, but also the knowledge that the money is being lent on to SMEs looking to grow, delivering double value and supporting investment in the UK.”