Almost half of Britain’s small business owners are now using artificial intelligence tools, with adoption more than doubling in the past year, according to new research from insurance provider Simply Business.
The company’s 2026 SME Insights Report found that 47% of small business owners were using AI in August, compared with 22% in 2025. Another 13% said they planned to start using the technology within the next six to 12 months.
That means 61% of small businesses are either already using AI or expect to begin doing so soon.
The findings are based on a survey of UK small business owners conducted between July 30 and August 7, alongside earlier research carried out during 2026.
Content creation was the most common use of AI, reported by 63% of businesses using the technology. Problem solving followed at 53%, while 50% said they used AI to generate ideas. Almost half, or 46%, said AI helped them save time on administrative work.
The rapid growth among smaller firms follows wider adoption among mid-sized companies. Research published in March by the Centre for Economics and Business Research for HSBC UK found that 55% of mid-sized businesses were using AI in some form by the end of 2025, compared with about 35% two years earlier.
Despite rising adoption, confidence remains relatively low among small business owners. Only 19% described themselves as very confident using AI in their daily work, while 33% said they limited their use of the technology to routine administrative tasks.
Security and privacy were the biggest concerns, cited by 44% of respondents. A further 39% said they could not identify a clear use for AI, while 36% were concerned about the accuracy of AI-generated results.
Overall, 31% said they did not understand how to use AI or were cautious about introducing it into their businesses. The findings point to a skills gap that could prevent smaller firms from gaining the full benefits of the technology.
Julie Fisher, chief executive of Simply Business, said AI represented one of the biggest changes identified in this year’s research. She said small firms needed practical guidance, accessible tools and time to understand how the technology could support their businesses.
Small business owners who already use AI also highlighted its potential to improve efficiency. Fay Phillips-Jones, founder of Coaching With Fay, said she uses AI for business planning, organising information and developing more efficient systems, while continuing to treat it as a support tool rather than a replacement for human judgement.
The findings suggest AI adoption among small firms is accelerating, but better training and clearer guidance could determine how effectively businesses use the technology.
