The average UK side hustle generates £700.50 a month, equivalent to around £8,406 a year, according to new research from small business insurance specialist Markel Direct.
The insurer surveyed more than 1,000 people with a side hustle. More than half (53 per cent) said they earn at least £500 a month from their side business, and 27 per cent said they generate £1,000 or more each month.
More than half of respondents (52 per cent) told Markel Direct that their side hustle income had increased over the past 12 months.
Millennials reported the highest earnings, with an average of £839.56 a month, equivalent to more than £10,000 a year, according to the survey.
By comparison, Gen Z respondents earn an average of £497.91 a month, Gen X respondents £522.46 and Baby Boomers £261.70.
Markel Direct said the growth in earnings may reflect greater demand for side hustlers’ services or products, or the time people invest in developing their side hustle into an established small business.
Six in 10 side hustlers (60 per cent) said rising living costs had made the additional income more financially important, while half (50 per cent) said they now rely on it to help cover essential expenses.
Asked about their main motivation for starting, a third (33 per cent) cited financial security and 32 per cent said keeping up with the rising cost of living. Among Baby Boomers, 47 per cent said financial worries drove them to take on a side hustle, the survey found.
Markel Direct said the findings suggest side hustles are increasingly being used as a financial safety net to help people manage bills, unexpected costs or longer-term savings goals.
Money was not the only reason given. According to the research, 31 per cent of respondents simply enjoy the work, while 28 per cent are using a side hustle to monetise a hobby or personal skill.
The findings follow research reported by Business Matters in 2020 which found two thirds of Brits aimed to make their side-line business their main job.
Many respondents see their venture as part of a longer-term plan. More than half (52 per cent) said their side hustle forms part of their future, and 43 per cent said they would leave their main job to pursue it full-time if given the chance.
A further 22 per cent said they plan to turn it into a full-time business, and 19 per cent said they hope to scale it into something larger over time.
The survey also found that 54 per cent of side hustlers have no insurance for their side hustle. A third said their activities could cause injury, property damage or financial loss to others, and half (50 per cent) said they never considered whether they needed specialist business insurance before starting.
Rob Rees, divisional director of Markel Direct, said: “Side hustles are becoming an important source of income for many people, but as these ventures grow, so do the risks. Whether someone is selling second-hand products, offering creative services or building a craft business, they may be exposed to allegations of injury, property damage or sub-standard services that cause a customer a financial loss. Taking time to understand the risks and arrange the right insurance cover can ensure side hustlers protect the growing businesses they have worked hard to build.”
Under HMRC rules, side hustle earnings above the £1,000 annual trading allowance must be reported to the tax authority. According to HMRC’s guidance for side hustlers, the allowance is a single figure covering income from all trading activities combined, and those who need to pay tax must register for Self Assessment by 5 October.
HMRC’s guidance also states that income from side hustles is not included on a payslip from a main job, and that it is the individual’s responsibility, not their employer’s, to tell HMRC about it.
