28 July, 2025
‘Cost of living’ concerns slowing for SME’s in 2025…but still remains the top threat
The number of small and medium-sized enterprises (SMEs) who see the cost of living as one of their greatest risks has fallen by 7% in the past 12 months. But it still remains the most common threat in 2025, according to new research from Allianz UK.
The survey also found that almost half (45%) of SMEs have been impacted by changes in consumer demand in the last 12 months.
Top five threats to SMEs
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| Risk | 2025 |
| #1 Cost of living | 54% |
| #2 Changes to legislation & regulation | 29% |
| #3 Trade tarrifs | 26% |
| #4 Cyber incidents | 24% |
| #5 Fiscal or tax constraints | 20% |
However, there are regional variations. Just a third (36%) of SMEs in London say the cost of living is one of their greatest risks, compared to 64% in 2024. Conversely, Yorkshire & Humber and the South West have seen increases, topping the list at 76% and 72%.
The majority of risks reflect that of the 2025 Allianz Risk Barometer – which reports on the views of larger organisations. Changes in legislation and regulation appear to be a higher concern to SME’s than larger businesses, with 38% stating that regulatory changes have impacted their business in the last 12 months.
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| Risk Barometer rank | SME rank | |
| Cyber Incidents (inc cyber-crime, data breaches) | #1 | #4 |
| Business Interruption (inc supply chain disruption | #2 | #9 |
| Changes in Legislation and regulation | #3 | #2 |
| Political risks and violence | #4 | - |
| New technologies | #5 | #7 |
Alex Ktenidis, Director of Digital & ALP, Allianz UK commented on the findings: “The name ‘cost of living crisis’ can sometimes mean the impact on businesses is overlooked. But when consumers have less disposable income and spending slows, that can hit SMEs hard.
I’m cautiously optimistic to see that the squeeze of the cost of living crisis is easing for some business owners. And looking at our research, It’s great to see SMEs clearly identifying the risks they face in today’s economy.
“Mitigating risks is what we do. We’re here to support business owners so they can focus on growth and innovation, providing peace of mind knowing that when disruptions occur, we'll be there to support and help them get back on their feet quickly.”
Media contact:
Sara Robinson | [email protected]
About Allianz Holdings plc
Allianz Holdings plc is the non-regulated holding company which owns the principal insurance operations of Allianz SE in Great Britain including Allianz Insurance.
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The Allianz Group is one of the world's leading insurers and asset managers with around 125 million* private and corporate customers in nearly 70 countries. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 764 billion euros** on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage about 1.8 trillion euros** of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we are among the leaders in the insurance industry in the Dow Jones Sustainability Index. In 2023, over 157,000 employees achieved total business volume of 161.7 billion euros and an operating profit of 14.7 billion euros for the group.
* Including non-consolidated entities with Allianz customers.
** As of September 30, 2024.
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