Businesses across the North West are losing out on more than half a billion pounds a year in ‘missing interest’, new research shows.

An investigation by Allica Bank indicates that small and medium sized businesses (SMEs) are failing to get the best interest rates on their business savings, losing out on over £500 million annually.

The analysis revealed the 'big six' high street banks, on average, are offering 1.45 per cent on small business savings; this has decreased from 1.59 per cent earlier in the year.

In contrast, challenger banks offer rates up to 4.33 per cent, which is nearly triple than the high street banks.

For SMEs storing an average of £75,000 in savings, this discrepancy would lead to a yearly loss of £2,157.

The total losses for the 265,840 SMEs in the North West equates to a staggering £573,416,880 for the regional economy.

This loss could be significantly greater for established SMEs that likely have more savings.

SMEs account for around 61 per cent of all UK employment, and make up roughly a quarter of the GDP.

This latest research follows onto last year's report by Allica, which showed that SMEs are losing more than £7.5 billion annually in ‘missing’ savings interest.

Pete Norris, North West relationship manager at Allica Bank, said: "The North West’s SME economy is the North West’s real economy, accounting for more than 30,000 businesses.

"These businesses are the life and soul of communities across the region and the difference between boarded up shops and vibrant high streets.

"Despite this, SMEs aren’t getting the returns they deserve from high street banks, with interest rates that are consistently lower than are offered to bigger businesses.

"The high street banks are taking SME customers for granted, and those customers should shop around and get the return on their savings that they deserve."