UK businesses are struggling to survive spiralling energy costs

As energy bills have continued to climb, many businesses are struggling to cope, according to new data from a survey conducted by financial comparison site NerdWallet.

The survey of 500 UK business owners and senior decision makers found that just under half (45 per cent) of business owners were worried that they may need to close their business. Only 11 per cent of businesses said they could cope with the rising costs.

The survey asked about measures business owners were taking to try and conserve energy and save money. Many businesses had now moved to a hybrid or full-remote work style, with 68 per cent of respondents moving to hybrid working, being in the office for fewer than five days per week (38 per cent with incentives, 30 per cent without). A further 32 per cent have moved to fully remote working.

Staffing relationships was a key factor in the findings. Twenty-eight per cent of businesses admitted they had stopped employees charging their devices at work as a measure to conserve energy. More dramatically, 25 per cent of business owners in the survey had let staff go due to energy costs.

With costs continuing to rise in 2022, some businesses were left with no choice but to raise their prices. Forty-three per cent of respondents in the survey stated that they had already increased their prices as a result of the energy crisis, with a further eight per cent saying they hadn’t done so yet, but were planning to in the future.

For those who were unable to make up their losses in increased product and service prices, it seems they’ve made budget cuts elsewhere to stay afloat. Forty-three per cent of those asked in the survey had cut budgets for staff training, and 38 per cent had stopped hiring new staff altogether. Thirty-six per cent said they’d also had to downsize their office to save money.

Speaking on the results of the survey, NerdWallet’s business finance expert, Connor Campbell, commented: “When we conducted this survey, we perhaps expected to see some level of hardship reflected in the results. However, the amount of scaling back and budget cuts laid bare in this survey highlights just how much UK businesses are struggling to get to grips with the energy crisis. 

“Although support has been put in place for a set period of time, businesses will need reassurance for the long-term future, so they can budget effectively and decide on their next steps.”