Owners of small businesses report a worsening in mental health after two years of lockdowns, rising costs and uncertainty, according to new research.

The survey of over 600 respondents by small business insurance provider Simply Business found that 22% rated their mental health as “bad”, at 18%, or “very bad”, at 4%, with 20% of them reporting that they were battling depression.

Alongside this, 51% reported feeling stressed, 39% have been experiencing anxiety and 22% have struggled with insomnia.

The survey into small business owners’ biggest challenges revealed that 81% were worried how the cost-of-living crisis was affecting their business.

Rising costs were seen as the biggest challenge for their businesses, by 65%, while 26% were worried they simply would not be able to pay their bills in 2023. Three in five of them (60%) said their profit margins were down.

As a result, 15% said they had no confidence in their business heading into 2023 and, due to uncertainty, 28% said they were unable to plan or budget and 10% had been unable to order stock.

Faced with rising business and living costs, a third of respondents said they did not take any real break over the Christmas holidays, with 13% working the whole of the festive period and 23% needing to check emails, take calls and process orders throughout.

In fact, 15% of them said they last took a holiday or break from running their businesses three to five years ago while 10% last took a holiday over five years ago.

Alan Thomas, UK CEO at Simply Business, said: “Small businesses account for 99% of all British businesses, contributing trillions of pounds a year to the economy in turnover. The recovery of our economy and communities is directly linked to their success.

“The self-employed are feeling the pressure of the current economic climate more than most, the effect of which is having a detrimental impact on their wellbeing.”

Simply Business published the results of its survey to tie in with the launch of the Better for Business Wellbeing Hub for owners of small and medium-sized businesses, working with a range of experts to provide free tailored resources and wellbeing tips.