The survey included findings indicating that as well as 62 per cent of the 500 interviewed admitting to a cash surplus this year, 69 per cent believe this will also be the case next year.

Only 36 per cent have started investing the cash pile being sat on, with a quarter holding 20 per cent or more of annual turnover.

Stephen Ibbotson, ICAEW director of business, said: “The results suggest that businesses have learnt their lessons from the 2007 financial crisis. We have seen business investment slow down, and firms are now sitting on their cash and waiting for the right opportunity.

“And those who are looking to invest are doing so in their staff to retain them, rather than on plant and machinery.”

This approach should be “commended”, according to Ibbotson, who sees it as a case of “getting houses in order”. He does not, however, want to see British businesses “battening down the hatches”, as this would stop the economic recovery.

“The next government should make it a priority to confirm the new rate of the Annual Investment Allowance as soon as possible. Businesses plan long term and waiting until December’s Autumn Statement isn’t quick enough,” he advised. “This will provide our growing firms with the confidence and impetus they need to take themselves and our economy to the next level.”

Read more about business confidence:

• UK middle of the class in SME business confidence
• SME confidence has led to increased international trade
• Businesses aim for 2015 growth by betting on customer loyalty

Increased confidence was cited by 70 per cent of survey respondents as the biggest encouragement to investing, while 52 per cent said it was long-term assurance about the UK’s economic direction.

Of those looking to spend in the next year, 66 per cent said it would be on IT infrastructure, 63 per cent on training and staff development and 54 per cent on marketing.

By Hunter Ruthven