Around a million small and medium enterprises (SMEs) in the UK lack basic digital skills, such as using the internet or sending email, according to new research.

Lloyds Bank’s digital index tracks uptake by smaller businesses and charities in the UK. Its latest findings reveal 23% don’t have basic skills.

The main barrier to digital adoption was a perceived lack of need. A quarter of businesses profiled in the research said digital was “irrelevant” to them.

Lloyds said the findings tallied to about 1.2 million businesses that lack an understanding of online and so could be missing out on opportunities for additional revenue and customer feedback.

It also found that companies with a high level of technological nous were much more likely to report sales going up in the last two years.

Miguel-Ángel Rodríguez-Sola, group director for digital at Lloyds Banking Group, said: “In just one year it is pleasing to see that over 100,000 more small businesses in the UK now have basic digital skills.

“But what is also clear is that real challenges remain – over a million small businesses and charities still lack basic digital skills and the perceived benefits of being digital remain.

“We cannot emphasis enough the benefits that digital adoption can offer – such as saving time, increasing revenue or funding or reaching wider audiences. Digital is the key to unlock these benefits.

“Even if an organisation does not believe they need to be online, many of their customers already are. There needs to be further awareness to give charities and businesses the confidence to do more online.”

On a regional basis the index recorded positive signs for the north of England. Both the North East and the North West posted big gains year-on-year in “digital maturity”.

This was partly due to regional programmes by organisations such as the charity Go ON UK.

Baroness Lane-Fox, chair of Go ON UK, said: “Perceptions and motivations remain key issues, with a quarter of organisations still believing that doing more online isn’t relevant to their business.

“And in an increasingly globalised marketplace, still only 13 per cent of organisations are using their website for e-commerce. This is an ever increasing concern that needs our imminent attention.”