Small businesses across Oxford are being “taken for granted” according to new industry data.

This latest research from Allica Bank shows that the city’s smaller companies are losing out on an average of £2,256 per year in "lost" interest payments

City businesses are losing a total of £17.6 million that could be reinvested in growth, innovation and productivity, the research states. 

Allica Bank claim that the “big six” high street banks are "ripping off their small and medium-sized business customers by offering them excessively low rates of interest on their savings".

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Oxford's businesses are missing out according to new data.Oxford's businesses are missing out according to new data. (Image: Newsquest) The new data shows that big British banks are offering an average rate of just 1.39 per cent to small businesses on their savings.

In comparison, challenger banks are offering rates of up to 4.40 per cent on the same cash.

This means that the average small and medium-sized enterprise (SME) with £75,000 of savings who is banking with one of the big banks is missing out on £2,256 a year in extra interest.

For those more established businesses with £1 million in the bank, this missing interest adds up to more than £30,080 annually.

With 7,830 small and medium-sized businesses across Oxford, this means a total of more than £17.6 million is being lost to the local economy every year.

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Allica Bank’s research calculates the value of lost interest to the UK as a whole is around £8.6 billion a year.

This figure has risen by 15 per cent from the £7.5 billion benchmark in September 2023 which is stated to be as a result of the volume of savings growing, and rising interest rates.

In response Allica Bank is calling for a shake-up of the business savings market, and for government and regulators to force big banks to notify their SME customers of the top rates in the market and where they can be found.

Gareth Adams, relationship manager for Oxford at Allica Bank, said: “Oxford’s SME economy is Oxford’s real economy, accounting for more than 7,000 businesses.

“These businesses are the life and soul of communities across the city and the difference between boarded-up shops and vibrant high streets.

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“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 Oxford’s economy and be put toward investment in the business and support for growth plans.

“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.”

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