The 2014 Information Security Breaches Survey (ISBS) found that 81 per cent of large organisations suffered a security breach, down from 86 per cent a year ago, while 60 per cent of small businesses reported a breach, down from 64 per cent in 2013.

More businesses (59 per cent) than previously said they are confident that they have the skills required within their organisations to detect, prevent and manage information security breaches compared with last year (53 per cent).

However, the average cost of incidents rose significantly for the third consecutive year. For small organisations the worst breaches cost between £65,000 and £1,15,000 on average and for large organisations between £6,00,000 and £1.15 million.

Andrew Miller, cyber security director at PwC, said: “Breaches are becoming more sophisticated and their impact more damaging. Given the dynamic nature of the risk, boards need to be reviewing threats and vulnerabilities on a regular basis. Organisations also need to develop the skills and capability to understand how the risk could impact their organisation and what strategic response is required.”