Jennie Rooney is the first to admit she has something of a split personality. By day, she is an in-house lawyer for a television company. By night, she is something different altogether: a novelist.

Typically, she will cycle into the office in central London, where she spends much of her day "drawing up contracts involving production companies buying formats such as The X Factor". At 5.30pm, Rooney returns home, eats an early supper and then sits down at her laptop for four hours to write, immersing herself in the world of cold war espionage that provides the backdrop for her third book.

Rooney would like her life to be different. She'd like to be a full-time novelist and, given the success of her books (her first, Inside the Whale, was nominated for the Costa first novel award in 2008), one might expect this to be possible. But the financial reality of such a move would make her life extremely difficult. In order to make a reasonable living, Rooney finds herself juggling a full-time job alongside her artistic endeavours.

"I do feel resentful," she admits. "I don't have as much time to think or to read as I'd like. I don't dislike my job and the people I work with are really nice but, in and of itself, there's a limit to how excited I can get about selling TV programmes such as Farmer Wants a Wife to Slovenia, although," she adds, drily, "it was a ratings hit."

Is it possible, in the current economic climate, for someone working in the creative arts to make a living from it? Unless you have the good fortune to be a Damien Hirst or a JK Rowling, the answer increasingly seems to be no. For artists who are already faced with low job security and the absence of company benefits such as pensions or paid holidays, the impact of the global financial crisis has been keenly felt.

The statistics make for uncomfortable reading. Almost a third of visual and applied artists earn less than £5,000 a year from their creative work, according to a survey conducted last year by Artists' Interaction and Representation (AIR); 57% of the 1,457 respondents said that less than a quarter of their total income was generated by their art practices and only 16% of them paid into a private pension fund, raising questions about how professional artists will support themselves once they reach retirement age.

The figures are not much better for musicians. PPL, a music licensing company that collects royalties on behalf of 24,000 performers, says that 90% of them earn less than £15,000 a year. A similar proportion of songwriters and composers earn less than £5,000 a year.

Then there is the added pressure of austerity-era cuts. Local authorities anticipate cuts of 7.1% each year for the next two years and the arts are often earmarked as dispensable in comparison with "frontline organisations". This leads to an inevitable loss of commissions and grants, in a climate where competition is already rife – individuals applying for grants to the Arts Council already have only around a 32% success rate nationwide.

"Arts history is full of double jobbers," says the actress Louise Brealey, who recently starred alongside Benedict Cumberbatch as the lovelorn Molly Hooper in the BBC's hit show Sherlock. "The recession, and the government's handling of the recession, has just made it that much harder.Politicians certainly see the arts as an easy target. The arts are not obviously saving lives, but I think they improve lives."

Brealey, like many of her contemporaries, has a portfolio career. She used to juggle acting jobs with journalism and was the deputy editor of Wonderland magazine: "At one point, I was rehearsing at the Royal Court and editing a piece about Twin Peaks' 20th anniversary in my tea breaks." More recently, she has been working as a documentary researcher and has just produced a children's comedy drama for the BBC, The Charles Dickens Show.

For Brealey, the fact that jobs in the arts are underpaid and underfunded has serious repercussions. "In journalism and TV production, it's getting more difficult all the time for kids from poorer backgrounds to break in because you're expected to work for nothing in endless internships," she says. "Without someone bankrolling you, that's impossible. The upshot is that working-class voices will be heard even less frequently than they are already."

Rob James-Collier, who plays Thomas the footman in Downton Abbey, aired similar concerns in an interview earlier in the year with the Radio Times in which he claimed that working-class performers were being squeezed aside because they did not have the "comfort blanket" of a wealthy family to support them. Collier, who was raised in Stockport and funded his career by working as a bricklayer's assistant and packing frozen pasties in a factory, said that in order to get into acting, "you have to work for a year without money".

According to Equity, the performers' union, at least two-thirds of actors are out of work at any time. The union's minimum rates (£379 per week for regional repertory; £497 per week for a West End play in a 799 seat theatre; £607 in an 1,100 plus theatre) are set at a level intended to see them through the lean times of silent phones and failed auditions, but it can still be challenging to make ends meet. Authors' advances are supposed to perform a similar function but they, too, have dwindled dramatically since the days when a 21-year-old unknown called Zadie Smith received a £250,000 golden handshake for her debut novel, White Teeth, while still at university.

Debs Paterson, who directed her first feature film, Africa United, last year to considerable critical and popular acclaim, found that the money she was paid as a novice director "spread pretty thin". "I was paid properly and I felt very lucky; I've got no complaints," she says. "But it represents a year-and-a-half of work, plus the exhaustion, plus the time we've put in before that getting it off the ground."

Paterson worked in a cinema, directed corporate videos and designed websites to raise money for her first short film. "A film is basically like a high-risk start-up," she says. "It can work brilliantly or it can be a total disaster and there's a weird alchemy behind whether it's going to work or not. Nobody knows."

Even established artists find it hard to make ends meet. In March, Susan Hill took to her Twitter page to claim that, despite the film adaptation of her bestselling book The Woman in Black having grossed more than £100m worldwide, "I am still broke".

Likewise, when Hilary Mantel won the Booker prize in 2009 for Wolf Hall, the £50,000 went – rather unglamorously – on reducing her mortgage. "I had been publishing for over 20 years and although the reviewers had been consistently kind, I had never sold in great numbers," Mantel wrote last year. "It is hard to make a good income from fiction alone."

It was ever thus. Gillian Wearing used to be a telephone market researcher while Billy Bragg once worked at an all-night petrol station. Emma Chaplin, the guitarist and keyboard player from the five-piece indie rock band the Long Blondes supplemented her income by working in a Leeds library. Calvin Harris made his debut album while stacking shelves in the Dumfries branch of Marks & Spencer.

In other countries, there are different approaches. In Denmark, selected artists are awarded life-long annual stipends. In Sweden, the government offers five- and 10-year arts scholarships. Interestingly, however, the majority of people I spoke to in the UK prefer to maintain their artistic independence rather than taking money from the state.

"I think it's amazing there are public subsidies," says Paterson. "But I think there's a danger to it as well. Nobody owes me a living and if I'm going to spend someone's money, I want to be able to give it back to them. Obviously it would be nice to go on holiday a bit more often and not be worrying about money, but I have this whole theory that when people get too comfortable, they become rarefied.

"If you have a computer and a degree, you're already in the top 1% of the planet, so why should I get to float around without having to earn a living? I want to earn my stripes. I don't want anyone to say, 'You don't deserve to be here.'"

Rooney agrees: "It's been alarming to see how much grants have been cut, but I've always thought I'd wait until I really needed them to apply. I can have these two jobs at the moment, but if I were to have a kid, for instance, I couldn't.

"I've seen Arts Council grants and subsidies as being there for people who really require them: if you've been a writer for 10 years and there's nothing else you can do and you can't get another job, for instance. For me, it's similar to unemployment benefit really."

And there is an added advantage to getting out and working in the real world. Although the romantic notion of a penniless artist living in a garret has plenty of cultural precedence, it does leave said artist without much in the way of day-to-day inspiration (plus, they almost always end up addicted to absinthe or dying of consumption). Having a day job, says Rooney, can feed back into your work: "I was a history and English GCSE teacher for a while after the publication of my first book and there's nothing like teaching a class of 15-year-olds to make you realise what holds the attention. I got better at the 'talking' part of writing and at how to present a book in a way that keeps people's interest."

As someone who is a full-time journalist and also writes novels, I tend to agree. My job as a journalist means I'm privileged enough to meet people from all walks of life and ask them nosy questions, which is one of the best insights into the human condition anyone could ask for. And as Rooney puts it: "Having another job does drive me on more because I know I only have a certain amount of time to write, so I get on with it."

But whether such a lifestyle continues to be feasible as the years go by is a moot point. Louise Brealey says that she knows "a lot of people who've stopped acting because they were paying the bills with temping and telesales and in the end it ground them down. It's hard to stick with it if you're breaking your heart in TFI Friday's every night," she adds. "That's fine when you're starting out, but after a decade it can get a bit wearing."

The Opposite of Falling by Jennie Rooney is out now, published by Vintage