Budget jitters see SMEs cut costs and delay hiring

Feeling bombarded by Budget news? Arguably never before has a Budget been so widely trailed. New ideas are run up the media flagpole every day, either from purposeful briefing or leaks. And it's provoking a strong reaction among small business owners.

Pessimism over the upcoming Budget is already influencing SME decision-making, with many businesses taking pre-emptive action according to a recent survey by wealth and asset management firm Rathbones.

In a poll of over 1,000 founders, owners, and senior executives of small and medium sized businesses, Rathbones found nearly half (46%) believe this year’s Budget will be bad for business. Only one in five (22%) expect a positive Budget for them.  

The cause of this concern? Tax rises.

Seven in 10 said rising business taxes was their biggest worry, with one in eight (12%) fearing increased regulation and one in seven (14%) reduced support from the government.  

What are businesses doing in response? Among those who have already acted, almost a third (32%) have cut costs or restructured, while 31% have delayed hiring.  

Interestingly though, not all changes have been defensive – around 30% of SMEs have expanded into new markets or regions, and 29% have launched new products or services to strengthen their position ahead of potential policy shifts.

For financial advice businesses worried about the future this is a great time to review your offering. You could take a bit of time (hard for busy small business owners but try to carve some out) and look at:

1. Sharpening your client profile and compliance messaging. Clearly define whether you specialise in retirees, young professionals, business owners, or another niche, and make sure your value proposition is presented in FCA-compliant language.

2. Consider creating clear, fixed-fee guidance packages. Price clarity aligns well with Consumer Duty expectations. You could offer transparent services like a ‘Pension review and recommendation pack’ or a “First-time investor starter plan”.  

3. Publishing simple, jargon-free educational content – Share short posts explaining common UK financial topics (ISAs, pension annual allowance, protection basics). Consistent, plain-English content builds trust and positions you as a reliable adviser.

Remember, periods of flux – like a big Budget – create challenges but also always offer up opportunities to those who know how to grasp them.

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