22 Jul 20

Financial services companies to cut fleets by 27%

Companies in the financial services industry, which have traditionally run some of the biggest company car fleets in the UK, are planning to cut back expenditure on vehicles by 27% over the next year, according to a survey by the CBI and PwC.

The quarterly survey of 111 insurers, finance houses and other firms in the financial services found that IT is the only area where companies forecast greater investment in the aftermath of coronavirus.

Training expenditure will suffer the greatest cut during the next 12 months, down 51%, followed closely by marketing, down 44%, while land and buildings spend will decline by 37%. Investment in vehicles, plant and machinery is set to drop by 27%. Against this depressing outlook, IT spend is set to nudge ahead by 4%.

Andrew Kail, Head of Financial Services at PwC, said: "While the financial services sector has been hit less hard than industries such as retail it is no surprise to see levels of optimism decline. Business volumes and margins have inevitably fallen as customer demand has waned.”

More than half (55%) of the firms surveyed attributed the falls in investment to uncertainty about future demand and their business prospects, with business volumes down by 33% at finance houses and 34% lower at general insurers.

Authored by: Jonathan Manning