Four in five small and medium-sized enterprises (SMEs) are concerned about how the Autumn Budget could impact their business savings, according to research from Uswitch.com.
The findings come despite signs of progress, with nearly half of business owners reporting that their savings increased over the past year and more than half expecting further growth in the next 12 months.
However, rising costs, tax uncertainty and late payments continue to limit confidence among small firms.
Three in five SME owners (61%) identified increasing costs for energy, rent, and materials as the biggest barrier to saving more, while 39% cited the tax burden and 30% pointed to late payments from customers and clients.
Speculation around potential VAT changes in the Budget has added to uncertainty, with experts divided on whether the threshold could rise to £100,000 or fall to £30,000.
Andy Elder, Uswitch business savings expert, said: “It’s encouraging that so many small firms have grown their savings in recent years.
“But with rising costs and ongoing economic uncertainty, that progress remains fragile. Businesses need clarity and practical support to turn short-term gains into lasting financial resilience.”
The research found that around a third of SMEs now aim to hold four to six months’ worth of operating expenses in reserve, suggesting that more businesses are prioritising financial preparedness.
Yet not all are meeting their targets, with 17% reporting a decrease in savings over the past year.
When faced with a financial shortfall, one-third (33%) of SME owners said they would rely on business savings first, while 23% would use personal funds and 16% would cut staff or operating costs.
Just 12% said they would seek loans or overdrafts, and 5% indicated they would consider closing their business.
Elder added: “Small businesses are caught between the need to save for the future and the reality of rising costs and delayed payments. Timely policy measures on payment terms and targeted operating-cost support could provide the relief they urgently need.
“Most SMEs plan to grow their savings over the coming year, which is a positive sign. But sustaining that progress will require stable policy, predictable costs, and faster payment cycles.”
