Almost half (49 per cent) of UK SMEs report planning to spend less than £1,000 on cyber security in the next 12 months, which could leave them vulnerable to substantial losses, according to a new report.

The latest Zurich SME Risk Index revealed that 16 per cent of SMEs fell victim to a cyber attack in the last year. This works out to more than 875,000 across the country, with businesses in London being worst affected. Some 23 per cent of companies based in the capital reported that they have suffered a breach within this period.

Of the businesses that were affected, 21 per cent said that it cost them more than £10,000, while 11 per cent said it cost them over £50,000.

However, Zurich found that despite the number of attacks and the significant losses faced by companies, business leaders are not investing significantly in cyber security in the coming year. The survey of over 1,000 SMEs found that 49 of SMEs planned to spend £1,000 or less on their cyber defences in the next 12 months, while almost 22 per cent said they don’t even know how much they will spend.

Zurich said the results show that, for businesses of all sizes, the robustness of cyber security is now a genuine concern for winning and maintaining business contracts. A total of 25 per cent of medium sized businesses said they have been asked directly by a current or prospective customer about what cyber security measures they have in place. Meanwhile, 11 per cent of small companies reported the same thing being asked of them.

Paul Tombs, head of SME proposition at Zurich, commented: “While recent cyber attacks have highlighted the importance of cyber security for some of the world’s biggest companies, it’s important to remember that small and medium sized businesses need to protect themselves too. The results suggest that SMEs are not yet heeding the warnings provided by large attacks on global businesses.”

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