UK small firms' AI use more than doubles in a year

AI use among UK small businesses has more than doubled in a year, according to new research from insurer Simply Business. Adoption rose to 47% from 22% a year earlier.

Another 13% of small business owners said they planned to start using AI within the next six to 12 months, taking the share either using the technology or preparing to do so to 61%.

The data points to a gap between adoption and confidence. Only 19% of respondents described themselves as very confident using AI in day-to-day work, while 33% said they used it only for routine administrative tasks.

Among owners not using AI, security and privacy concerns were the most commonly cited barrier, at 44%. That was followed by not seeing a clear use for the technology at 39%, uncertainty about how to use it at 37%, and concerns about accuracy at 36%.

The figures suggest many small firms are not using AI chiefly as a back-office tool. Respondents already using it were most likely to turn to it for content creation, problem solving and idea generation.

Content creation was the leading use case, cited by 63% of AI users. Problem solving followed at 53%, while 50% said they used it to generate ideas. By comparison, 46% said it helped them save time on administrative work.

Thinking partner

This pattern suggests small business owners are increasingly using AI to support judgement, planning and creative work, rather than relying on it only for repetitive tasks. It may also help explain why confidence is lagging behind adoption, as these uses can carry greater perceived risk around quality, privacy and control.

Simply Business surveyed 1,842 UK small business owners for the research. The dataset covered businesses of different sizes and sectors, from sole traders to larger companies.

Julie Fisher, Chief Executive Officer 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.

"One of the most significant shifts we've tracked this year with our annual SME Insights Report is AI adoption. Almost half say they now use AI in their business, up from 22% in 2025. Yet 44% say they're wary of security and privacy when it comes to AI tools, and 39% aren't sure how it 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."

The findings add to a wider debate over whether smaller firms have the support needed to adopt AI effectively. While large companies often have dedicated technology staff and training budgets, smaller businesses tend to make decisions with less formal expertise and less time to experiment.

Skills gap

The report points to that challenge in practical terms. Nearly one in three respondents said they did not understand how to use AI or were wary of integrating it into their work, reinforcing the idea that access to tools alone is not enough to drive confident use.

For sole traders and microbusinesses in particular, AI can promise quick gains while also raising questions about data handling, reliability and how much to trust machine-generated output. That tension was reflected in comments from business owners already using the technology.

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."

Another small business owner in the survey described AI as useful for both business development and reducing workload. Her comments also pointed to concerns about whether support for smaller firms is coherent enough to meet demand.

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 reducing my personal workload. 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."

Bajra founded Edvance AI while studying cell biology at the University of St Andrews, after teaching herself the basics of AI and later turning that knowledge into a business focused on the human side of adoption.

Her own use of AI centres on automating day-to-day tasks to free up time for creative and strategic work, reflecting the wider shift in the survey towards idea generation and problem solving as core uses for small firms.

The findings suggest that for many UK small businesses, the question is no longer whether AI has entered the workplace, but how confidently owners feel able to use it in ways that affect decisions, planning and growth. Only 19% of respondents described themselves as very confident using AI day to day.