Nearly four in 10 UK small firms were hit by a successful cyberattack in the past year, according to the latest Hiscox Cyber Readiness Report. The UK cyberattack rate reached 38%, significantly above the 29% global average recorded among nearly 7,000 smaller businesses surveyed worldwide.

The 10th annual report surveyed cybersecurity decision-makers at smaller firms, including 1,000 respondents in the UK. Britain recorded the highest attack rate among the markets included in the research. Globally, businesses that experienced an incident reported an average of four attacks during the past 12 months.

UK cyberattack Rate Outpaces Global Average

The findings place UK small businesses at greater exposure to successful cyberattacks than their international counterparts. While 29% of organisations globally reported a successful attack, the figure rose to 38% among small UK businesses.

The report also found that cyber incidents are creating measurable financial and operational costs. Globally, each incident cost organisations an average of $52,000 and resulted in around 32 hours of operational disruption.

In the UK, the average cost per cyberattack was $35,908, equivalent to £26,650. Although that figure was below the global average, the higher frequency of attacks means UK firms are more likely to encounter those costs.

The global attack rate also fell from the 59% figure reported in Hiscox’s previous annual report. However, the two figures are not directly comparable because last year’s research surveyed a broader group of 5,750 businesses across seven markets, while this year’s report focuses specifically on almost 7,000 smaller firms.

Cyber Incidents Affect Business Growth

Cyber incidents are also influencing business decisions beyond immediate recovery costs. Globally, 32% of affected firms said cyber incidents delayed growth and expansion plans.

Other reported consequences included higher staffing costs for 31% of businesses, direct financial damage for 30%, and lost business opportunities for 29%.

Reputation and customer trust ranked as the most significant cyber-related risk, cited by 48% of businesses surveyed. Operational downtime or business interruption followed at 46%, while supply chain or third-party disruption was identified by 44%.

Among firms that experienced an incident, 28% faced financial penalties and 26% experienced damaging publicity.

UK Firms Increase Cyber Resilience Spending

Businesses are responding to the continuing threat by increasing spending on cyber resilience. The global average investment reached $51,000, with firms directing spending toward new technology, specialist staff and employee training.

New technology was adopted by 51% of firms, while 55% invested in specialist staff and 62% updated employee training.

UK businesses reported considerably higher spending, averaging $59,700, or £44,294, on cyber resilience. That placed the UK third among the markets surveyed for resilience spending.

The report also identified a growing connection between cybersecurity performance and executive compensation. Globally, 32% of firms said executive pay is now linked to cybersecurity performance. Among UK small firms, the figure was 25%.

Cyber Insurance Gap Remains

The findings also highlight a continuing gap between cybersecurity exposure and insurance uptake in the UK. Government data from the Department for Science, Innovation and Technology shows that 10% of UK businesses and 5% of charities hold a dedicated cyber insurance policy.

Separate research cited in the report found that just over 40% of UK SMEs hold cyber insurance, compared with around 63% of medium-sized firms and approximately 70% of FTSE 100 companies.

The latest Hiscox findings therefore show a combination of high cyberattack exposure, substantial investment in cyber resilience, and relatively limited cyber insurance uptake among UK businesses.