Research by Hampshire Trust Bank has found that the average savings balance for SMEs now stands at £446,000.

The annual study by the specialist bank also revealed that current accounts have also been impacted, with the average balance now standing at £409,000, a 3% drop compared with 2016.

This means that on average for every £1 in a current account that an SME holds, there is another £1.09 in a savings account.

This is a decrease on the £1.31 figure recorded in 2016.

In the next 12 months, over half (56%) of SMEs intend to leave the amount of money in business savings at the same level.

Some 30% said they expected to increase the amount, while 14% said they aimed to decrease their savings pot.

Of those that intended to increase business savings, 27% said they planned to do so because they were anxious about the impact of Brexit, while a quarter (25%) were concerned about the long-term economic outlook.

Concerns about the short-term and long-term economic outlook were expressed by 8% and 4% respectively back in 2016.

Uncertainty regarding the long-term economic outlook was cited as the main reason by 35% of SMEs for planning to decrease savings in the next year.

Just over a third (34%) of those increasing savings said they were doing so to fund a major purchase (2016: 17%).

When the SMEs were asked how they would use the return from their savings, 28% said they would invest in business infrastructure, while 25% claimed they would use it for research and development.

Stuart Hulme, director of savings at Hampshire Trust Bank, said: “While we are continuing to see growth across our business savings portfolio, the outcome of the EU referendum and the current uncertain economic and political environment is clearly having an impact on SME savings balances and habits.

“Savings can provide a cushion in times of potential financial bumps in the road, with nearly half (49%) of the smaller businesses we surveyed saying they chose to lock money away to build a cash buffer.”

The study found that SMEs are willing to tie up their savings for an average of eight months, one month less than in 2016.