In the latest edition of our annual Enabling growth across the UK report, we included for the first time, analysis of the number of financial and related professional services businesses in each UK region and nation. As of March 2023, there were 277,830 financial and related professional services businesses operating in the UK: 21% (59,215) in financial services and 79% (218,615) in related professional services. London and the South East dominate financial and related professional services business representation, with 28% and 17% of the UK total, respectively, as evident in this chart:
Number of financial and related professional services businesses by region, March 2023
Source: Office for National Statistics
In these two regions (as well as in the East of England, North East, Scotland and the West Midlands), the split between financial services businesses and related professional services businesses was about 20%/80%. This was in line with the average across the UK, where the split was 23% financial services / 77% related professional services—so these regions showed only a very slightly higher representation of related professional services businesses compared to the UK average. In three regions and nations—the North West, East Midlands and Northern Ireland—the data skewed the other way, with approximately 30% of business in financial services and only 70% in related professional services (so, with a slight skew towards financial services businesses relative to the UK average).
Our annual report examines the contribution of financial and related professional services to all the UK regions and nations, with that contribution measured through industry employment and GVA (gross value added). In contrast to the business numbers analysis shown above, when considering employment most regions showed a nearly equal split between financial services (average:46.7% of total financial and related professional services employment) and related professional services (average: 53.3% of total industry employment). The two exceptions were the North West and West Midlands, where nearly three-quarters of employment in the industry was in related professional services:
Number of Businesses and Employment
Source: Office for National Statistics
The employment data are for the calendar year 2022, whereas the business numbers are available on a fiscal year basis—in this case, covering the period April 2022-March 2023. So, the comparisons are imperfect, but the overlap is substantial enough to at least give an indicative sense of how industry employees are distributed among business types.
For instance, it is evident that there are lots of small related professional services firms; financial services account for only 20% of industry business numbers, but employ nearly half (44%) of industry employees, whereas related professional services account for 80% of industry businesses while employing just over half of the industry workforce.
Related professional services firms are also more evenly distributed across different firm sizes. In every employee size band there are more related professional services firms than there are financial services firms. However, they are particularly over-represented among micro-organisations (0-4 employees), with four times the number of related professional services firms as financial services firms in that category:
Number of financial and related professional services businesses by employee size band, as of March 2023
Source: Office for National Statistics
This analysis serves as a reminder that although most of the iconic names in the financial and related professional services industry are large, multinational companies, 99% of UK businesses are in fact SMEs, and this is as true for the industry as it is for the economy as a whole.
