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Almost half of UK small business owners are now using artificial intelligence tools, according to research released on 8 September by the insurance provider Simply Business, which found adoption has more than doubled from 22 per cent in 2025 to 47 per cent.
A further 13 per cent of owners plan to start using AI within the next six to 12 months, meaning 61 per cent are either using the technology already or expect to be soon, according to the company’s 2026 SME Insights Report. The report draws on a survey of UK small business owners carried out between 30 July and 7 August 2026, alongside earlier studies conducted this year, Simply Business said.
Among businesses using AI, the most common applications are creating content, cited by 63 per cent, problem solving on 53 per cent and generating ideas on 50 per cent. Some 46 per cent say the technology is helping them save time on administration.
Research published in March by the Centre for Economics and Business Research for HSBC UK found that 55 per cent of mid-sized companies were using AI in some form by the end of 2025, up from about 35 per cent two years earlier.
Confidence gap
Confidence has not kept pace with adoption, the report found. Just 19 per cent of small business owners describe themselves as “very confident” using AI day to day, and 33 per cent say they use it only for routine administrative tasks.
Security and privacy concerns are the most commonly cited barrier, mentioned by 44 per cent of owners. Not seeing a clear use for AI is second on 39 per cent, ahead of concerns about accuracy on 36 per cent. Simply Business said the findings indicated that for many small businesses the obstacle was not access to the technology itself but a lack of clarity about its practical application.
Nearly one in three owners, 31 per cent, say they do not understand how to use AI or are wary of integrating it into their work, which the insurer said pointed to a wider skills gap. A Business Matters analysis published in June identified thin margins, scarce digital skills and a shortage of time to experiment among the reasons AI adoption is not spread evenly across the economy.
Calls for guidance
Julie Fisher, chief executive of Simply Business, said: “Adaptability and resilience are central to the DNA of small business owners and time and again they have proven they are drivers of innovation, finding new ways to grow even in the face of challenging trading conditions.”
She said the rise in AI adoption was one of the most significant shifts tracked in this year’s report, but that many owners remained wary of security and privacy around AI tools and unsure how the technology could be useful to them.
“To help unlock even greater levels of innovation and productivity, small businesses need tailored guidance on how AI can be used, accessible tools, and time to discover how it can work for them on their terms,” Fisher said.
Google launched its AI Works for Business programme of free workshops for small firms with the Department for Business & Trade and NatWest in 2025, after its research found UK small businesses lagging US counterparts on adoption.
Fay Phillips-Jones, founder and HR career coach at Coaching With Fay, said: “AI has played an important role in accelerating my business. As a sole founder, I use it to challenge my thinking, support business planning, organise information and develop more efficient systems. However, I treat AI as a thinking partner, not a substitute for thinking.”
She added: “I would welcome greater access to practical, funded education on responsible AI adoption. The opportunity for sole traders and microbusinesses is enormous, but the technology is evolving at an extraordinary pace.”
Ideja Bajra, founder of Edvance AI, said: “The biggest benefit to using AI is speed and efficiency; automating your processes means you can reach clients faster and more consistently. It’s also been a huge help in personal workload for me. There are already some encouraging government initiatives focusing on upskilling and AI integration, but from the perspective of a small specialist advisory firm, the support can sometimes feel fragmented.”
