New analysis from the Current Account Switch Service, owned and operated by Pay.UK, reveals that nearly a third (31%) of 16-19-year-olds are already earning money from a side hustle, but six in ten (60%) of those doing so are unsure whether a personal or business account is right for them. Pay.UK is encouraging young earners to consider which account best suits their goals, circumstances, and the way they manage their money.

A survey of 2,000 young people aged 16-19 found that 23% currently have one side hustle and 8% juggle more than one. A further 28% plan to start one in the next 12 months, meaning almost six in ten (59%) already have a side hustle or intend to start one soon.

The findings come at a time when business bank account switching is on the rise, with the Service recording 8,136 small business and charity account switches between April and June, up from 7,915 in the previous quarter. However, having a side hustle doesn't automatically mean someone needs a business account. The right option will depend on an individual's circumstances, how they earn money, and how they plan to manage it.

Most side hustlers rely on their everyday account

Among the respondents currently earning money from a side hustle, more than half (56%) mainly use the same personal bank account as they do for everyday spending. A further 15% use a separate personal account, 12% use a mix of accounts, and only 9% use a business bank account. The remainder are unclear which account they use, take cash in hand, or use another type of account.

Despite most already using a personal account, confusion about which type of account they should use remains widespread. Almost six in ten current side hustlers (60%) agree they don’t know whether they are supposed to use a personal or business account, including 22% who strongly agree, with only 13% in disagreement.

This lack of clarity rises with age: two-thirds (62%) of 18-19-year-old side hustlers are unsure which account type to use, compared with 42% of 16-17-year-olds. Young men are also slightly more likely than young women to have a side hustle (35% versus 29%) and to be uncertain about the right account (66% versus 55%). Side-hustle activity is highest among part-time workers, at 39%.

Choosing an account that fits

Having a side hustle doesn’t automatically mean someone needs a business account. A young person earning occasional money from babysitting or odd jobs may have different needs from someone receiving regular customer payments and managing ongoing costs.

Before deciding whether a personal or business account is right for them, young earners should consider:

• How regularly they earn income
• Whether they want to separate personal and side-hustle finances
• The features and services they need from an account
• Any fees or eligibility requirements
• Whether their existing account terms already meet their needs

In some cases, an existing personal account may be suitable. Where someone believes a different account could be a better fit, they should compare options carefully and seek independent guidance if unsure.

The Current Account Switch Service website hosts a handy online questionnaire asks a few quick questions and provides a personalised checklist of things to consider when comparing accounts.

John Dentry, Product Manager of the Current Account Switch Service at Pay.UK, said:

"It's interesting to see that so many young people with a side hustle aren't sure which type of account is right for them. Every side hustle is different, so the best option will depend on how someone earns money, how they want to manage it and what they need from their account.

For some people, their existing account may already meet their needs, while others may decide that a different account is a better fit. What's important is taking a little time to compare the options available and understand what works best for their circumstances.

Our online questionnaire provides a personalised checklist to help people think through those considerations. If another eligible personal or business current account turns out to be a better fit, the Current Account Switch Service provides a free, simple and guaranteed switch in seven working days.”