Small and medium-sized enterprises (SMEs) across the UK are showing resilience, with 60% expecting turnover growth in the next three months, according to new research commissioned by Uswitch business savings experts. Despite pressures such as rising costs and inflation, SMEs continue to demonstrate confidence in their ability to expand, underscoring their central role in the UK economy. SMEs represent more than 99% of UK businesses and contribute £2.75 trillion to private sector turnover.
The research highlights that 19% of SME owners anticipate significant growth, while 41% expect moderate growth. Only 14% foresee a decline, with 11% predicting a moderate drop and 3% expecting a significant decline. This contrasts with larger businesses, which have faced weaker sales and lower confidence.
Key drivers of optimism include increased consumer demand, cited by 27% of respondents, and improved access to finance, noted by 23%. However, concerns remain, with 32% pointing to rising operational costs and 30% citing inflation as pressures on profitability. These challenges include higher energy prices, wages, and raw material costs.
A clear generational divide shapes SME expectations. Among entrepreneurs aged 18 to 34, 84% expect turnover growth in the next three months, with only 5% anticipating a decline. In contrast, only 30% of business owners over 55 expect growth, while 25% foresee a drop. Financing strategies also differ. Younger entrepreneurs are more likely to seek external funding, with 74% planning to do so compared to 31% of those over 55. Older business owners are more likely to express concerns about costs, government policy, and weaker consumer spending. Among this group, 53% cite rising operational costs, 48% point to regulatory uncertainty, and 46% mention inflation and weaker demand. Only 12% of over-55s cite strong recent business performance, and just 5% expect significant turnover growth.
Across the SME sector, 51% plan to seek external funding in the next three months. Access to finance is viewed as essential for investment in technology, research, development, and workforce training. Younger entrepreneurs are particularly proactive in pursuing capital to scale operations.
Andy Elder, Uswitch business savings expert, said: “You can see two very different instincts in the data. On one hand, younger founders are ready to back their plans with finance and scale quickly; on the other, more established owners are tightening their finances and managing costs. If you run a small business today, the practical takeaway is simple: know where you sit. If demand is returning for you, make a plan to fund and protect growth. If costs are the problem, focus on pricing, efficiency and the areas where you can control spend. Either way, being deliberate about finance, whether you borrow or restructure, is what separates businesses that grow from those that merely survive.”
Economic pressures remain, with inflation projected at 2.7% in 2025 and employer National Insurance Contributions set to rise. UK GDP is forecast to grow by between 1.2% and 1.5%. Despite these headwinds, SMEs are investing in innovation and workforce development. More than half plan to expand their teams, and nearly a quarter intend to offer pay rises, signalling their importance in driving recovery.