Business savings at risk from inflation: at a glance
What do I need to know? Nearly two-thirds of UK SMEs (64%) hold surplus cash in current accounts, which typically earn little to no interest.
Why does it matter? High inflation is reducing your purchasing power every year.
What does it mean for me? Your business can offset the erosion of value in your cash deposits by moving money into high-interest savings accounts.
Over the past 10 years, the UK economy has endured multiple shocks. Brexit, the pandemic, the cost-of-living crisis, and war in Europe and the Middle East have contributed to a shift in attitudes towards risk in small businesses.
Many firms rethought their supply chains. They shifted away from just-in-time strategies, which minimise inventory to reduce costs, to just-in-case strategies, which hold additional stock as a buffer against supply chain disruptions.
The consequences for the finance function have been profound. As businesses pivot to a semi-permanent crisis footing, CFOs and Finance Directors have prioritised building cash reserves.
But the threat of inflation is still prevalent. The UK appears highly sensitive to inflationary spikes, according to data from the ONS published in 2026.
In this article, you’ll learn how forward-thinking CFOs are turning their cash reserves into an increasingly valuable asset, despite persistent inflation.
The rising cost of doing business
Our latest research shows just how much businesses have had to weather. Over the past decade, the cost-of-living crisis and the Covid-19 pandemic have had the biggest impact on small businesses finances.
Today, the concerns may have shifted, but businesses are still feeling squeezed from several directions. Energy costs are one of the top financial pressures facing UK SMEs, followed by economic uncertainty.
When we look at what's driving that uncertainty, 51% of businesses point to persistent inflation and 34% to interest rate volatility.
Transforming a safe asset into interest earnings
High inflation erodes the value of cash reserves if left to languish in low-interest accounts.
According to Flagstone's Cash Performance Gap Report, only 28% of UK SMEs actively manage their cash reserves. Nearly two-thirds (64%) hold surplus cash in current accounts, which typically pay little to no interest.
But savings accounts often enjoy rates above inflation. This means that CFOs can move a substantial amount of their cash reserves into accounts and grow the value of deposits, even in challenging times.
Why now?
CFOs and Finance Directors would rather spend their time on strategy than paperwork.
Opening multiple business savings accounts used to involve filling out a range of time-consuming applications, each with their own business verification (KYB) and anti-money laundering (AML) checks.
But tools like Flagstone’s cash platform make it easier than ever to open multiple accounts for your business, all through a single application.
You can choose a range of banks and financial institutions, each with its own independent banking licence. That means the Financial Services Compensation Scheme (FSCS) protects your eligible deposits with each one separately.
This increases your protection should your bank go out of business, while ensuring you’re earning high levels of interest.
Discover how the managing director of a marketing agency built a high-yield cash portfolio with Flagstone, with no extra admin.
How businesses are responding to persistent inflation
Businesses have a challenging economic environment to navigate. And the CFO isn’t the only member of the executive team responsible to chart a course through turbulent times.
But CFOs and Finance Directors can now quickly and easily give their businesses more peace of mind.
By opening multiple, high interest savings accounts for your business, you can turn the cash reserves you’ve built into an asset.
Using cash platforms like Flagstone can make this straightforward, allowing you to increase your protection without expanding your paperwork.
Open multiple business savings accounts with Flagstone
Give your business cash the growth and protection it deserves. With a single login, Flagstone gives you access to hundreds of savings accounts from 50+ banks – more than any other cash platform.
