Will Self's lament for the death of the novel earlier this summer has been cast into stark relief by "shocking" new statistics which show that the number of authors able to make a living from their writing has plummeted dramatically over the last eight years, and that the average professional author is now making well below the salary required to achieve the minimum acceptable living standard in the UK.

According to a survey of almost 2,500 working writers – the first comprehensive study of author earnings in the UK since 2005 – the median income of the professional author in 2013 was just £11,000, a drop of 29% since 2005 when the figure was £12,330 (£15,450 if adjusted for inflation), and well below the £16,850 figure the Joseph Rowntree Foundation says is needed to achieve a minimum standard of living. The typical median income of all writers was even less: £4,000 in 2013, compared to £5,012 in real terms in 2005, and £8,810 in 2000.

Commissioned by the Authors' Licensing and Collecting Society and carried out by Queen Mary, University of London, the survey also found that in 2013, just 11.5% of professional authors – those who dedicate the majority of their time to writing – earned their incomes solely from writing. This compares with 2005, when 40% of professional authors said that they did so.

For Self, who wrote in the Guardian in May about how "the literary novel as an art work and a narrative art form central to our culture is indeed dying before our eyes", because "the hallmark of our contemporary culture is an active resistance to difficulty in all its aesthetic manifestations", the new statistics were no surprise. "My own royalty income has fallen dramatically over the last decade," said the award-winning author of novels including the Booker-shortlisted Umbrella. "You've always been able to comfortably house the British literary writers who can earn all their living from books in a single room – that room used to be a reception one, now it's a back bedroom."

Mal Peet, whose children's novels have won prizes from the Carnegie medal to the Guardian award, said his income from books had "dwindled really significantly" over the past four years. In the past, he said, he received royalty cheques of up to £30,000 for a six-month period. In the last half of 2013, his royalties for all his novels were just £3,000.

"My direct income from sales is abject – literally abject. There's been an absolutely radical decline in my income over recent years," said Peet. "I do live by writing, but that's because I have got a backlist of educational books which keeps on selling, and I have a pension, and I have to go on the road. Because I've a certain reputation, I can ask for a £25,000 advance, but then you spend a year writing the book, and £25,000 is a loan against sales and you can easily spend five years earning out. So that's £25,000 for six years."

James Smythe published his first novel in 2010 with an indie publisher, and he has published five with HarperCollins. He has been shortlisted for major science fiction awards, been glowingly reviewed, and won the Wales book of the year. He told the Guardian that his novels had never earned out. "Being a writer can't be treated like it's a job. It maybe was once, but no writer can treat it as such nowadays. There's no ground beneath your feet in terms of income, and you can't rely on money to come when you need it," said Smythe, who also teaches at Roehampton University.

Despite headlines about record-breaking deals – most recently for a slice of One Direction fan fiction, which earned Anna Todd a mid-six-figure deal with Simon & Schuster – the "vast majority" of writers receive advances that are well below the level that would make them equivalent to a salary, said Smythe. "I know very few writers who earn above the Minimum Income Standard, and that means that they need second jobs," said Smythe. "Awards and critical acclaim used to be enough, in the heady days of 1970s publishing. It's simply not, now."

The ALCS described the new figures as "shocking". "These are concerning times for writers," said chief executive Owen Atkinson. "This rapid decline in both author incomes and in the numbers of those writing full-time could have serious implications for the economic success of the creative industries in the UK."

Smythe said that many blame the numbers of books published for the decline in author earnings, "and it's true, shelf space is at a premium". Self-publishing also comes under fire, he said – but this is "even less of a way of earning money from your writing if you're any good than conventional publishing".

According to Smythe, "the industry works the way that it always has, just with tightened coffers". So "if you sell, you'll get more money next time around. If you don't, then you'll earn less. In most jobs, you work hard, and you deliver results. Unfortunately – and this is out of everybody's hands – working hard in publishing guarantees no such results. You could write the best book in the world, and it could still sell dismally. My publishers are great, in that they believe I'll write something that pays off. So I get to keep doing this. But one day, if I fail to deliver results, that will change. Why would you keep paying somebody money for no gain?"

A total of 2,454 writers took part in the ALCS survey, of whom 56% were men and 44% women. Seventeen per cent of respondents were aged 44 or under; 54% were aged 45-64; and 29% were aged 65 or over. The research, What Are Words Worth Now?, is being launched on 8 July at an ALCS debate at the House of Commons, where panellists including the novelist Joanne Harris and the poet Wendy Cope will take part in a debate entitled: "Are We All on The Same Page?: Can a Fair Deal for Writers be Balanced With a Fair Deal for All?"

"Most people know that a few writers make a lot of money. This survey tells us about the vast majority of writers, who don't," said Cope. "It's important that the public should understand this – and why it is so important for authors to be paid fairly for their work."