New research from the UK’s leading insurance premium finance company, Premium Credit, shows SMEs are most likely to raise prices for customers as they attempt to address soaring energy bills.
Premium Credit’s Insurance Index, which monitors insurance buying and how it is financed, found nearly one in four (23%) will increase prices to attempt to recoup rising costs ahead of nearly one in five (17%) who will cut running costs by lowering pay rises and not replacing staff who leave. Just 4% of SMEs questioned fear they may have to stop trading, and around one in twelve SMEs (8%) say they will cut jobs to keep business costs under control.
However, the research for Premium Credit’s Insurance Index, which shows more firms are turning to credit to ensure they maintain important insurance cover, found nearly two out of five (38%) of SMEs questioned do not know how they will address the issue of rising energy bills.
Some firms will change the way they work with 15% saying they will look at more remote working for staff where possible to cut bills while 12% will cut back on buildings and office space and around one in 20 (5%) will shut parts of the business.
Business investment will be hit – 11% of SMEs will cut back on investing in the firm while 13% will postpone plans for expansion. Around one in eight (12%) will run down company savings to afford bills.
Owen Thomas, Chief Sales Officer at Premium Credit commented: “SMEs are showing remarkable resilience in how they cope with rising energy bills but it is worrying that so many do not know how they will address the issue. Our focus is to ensure our partners offer finance every time to their customers, and we work together to present a compelling finance option through a seamless experience.
Our existing support for vulnerable customers is tried and tested, and we are reviewing what additional support is appropriate during this time of uncertainty.”
Premium finance companies like Premium Credit provide businesses and consumers with the ability to use a loan to pay for their insurance in monthly instalments. By managing insurance payments in this way, businesses and consumers can spread the cost of their insurance, rather than pay their premiums in one lump sum.