With living expenses continuing to increase, side hustles have become a lifeline for many.
The Economic Backdrop: Why Are Costs Rising?
The cost of living crisis is a big problem for households across the UK. While inflation has eased slightly to 2.5%, down from a peak of over 11%, the overall economic environment doesn’t feel much easier.
Rising bills, from energy to rent and food alongside a slow growth of real incomes, continue to squeeze household budgets.
According to Sky News, the largest price increases are expected to be:
- Energy Prices: The energy price cap will rise by 3% in April, pushing average annual bills to £1,785.
- Council Tax and Water Bills: Local authorities in England are set to raise council tax by up to 5%, and water bills will increase by 36% over five years, with some areas facing sharper hikes.
- Food Costs: Retailers warn of an additional 4.2% increase in food prices by the end of the year, driven by higher employer taxes and supply chain costs.
- Housing Costs: High mortgage rates are putting more pressure on households, with millions set to renew fixed-rate deals this year.
With living costs rising so steeply, it’s no surprise that so many people are looking for new ways to boost their incomes.
The Online Income Revolution: Why Are Young People Leading the Way?
A big driver of this trend is the growth of online income opportunities.
According to recent data by Finder.com and Adobe, 43% of Brits have a side hustle in 2024, with the average income from these ventures at £900 per month.
Young adults, in particular, are embracing the digital economy, using social media, e-commerce platforms and gig work to make money online.
The most popular sectors for side hustles are creative industries (21%), retail and e-commerce (18%), and technology services (15%).
Regarding why these side hustles are so popular, 66% of respondents said extra income is their main reason for starting a side hustle.
Economic Benefits of Side Hustles
From an economic perspective, the rise of online work has both micro and macro implications:
Increased Household Income
Side hustles are helping people close the gap between income and expenses. With 20% of side hustlers earning over £1,000 per month, these ventures are becoming an important part of household budgets.
Boost to the Digital Economy
The popularity of online businesses supports digital platforms, payment systems, and freelance marketplaces, contributing to economic growth.
Skill Development
Side hustles often mean people need to learn new skills, from digital marketing to e-commerce management, making them more employable long-term.
Resilience in a Volatile Economy
Having more than one income stream provides a buffer against job insecurity and economic downturns, particularly for younger workers.
The Broader Economic Implications
The growth of online income streams reflects a shift in how people engage with the economy.
Traditional employment models are being supplemented—or in some cases replaced—by flexible, entrepreneurial ventures online.
However, it’s important to remember that this trend is a result of deeper structural issues such as:
Wage Stagnation: Despite average wage growth outpacing inflation since 2023, many households still feel the pinch as a result of rising living costs.
Economic Inequality: Not everyone has equal access to the resources and skills needed to succeed in the digital economy, potentially widening the wealth gap.
Online Side-Hustles: A New Economic Era?
The rise of young people making money online is both a response to and a reflection of the UK’s current economic climate.
While it does give them a way to navigate financial pressures, it also shows the challenges that need addressing, from wage inequality to the cost of living crisis.
For policymakers, supporting this trend means growing digital skills, simplifying tax compliance for small ventures, and addressing the root causes of economic strain.
For people, it’s a chance to unlock new opportunities, innovate, and build financial resilience in an ever-changing economic landscape.
The information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. While we aim to offer accurate and up-to-date insights, readers are encouraged to conduct their own research and consult with qualified professionals before making any financial or business decisions. Earning potential and results may vary significantly depending on individual effort, skills, and market conditions. Always approach online opportunities with caution and be aware of potential risks such as scams or legal obligations.