After tightening their purse strings in the early Nineties, when the recession bit, people have started to spend beyond their means, the market analyst Mintel said yesterday.
While personal disposable income has increased by 8.8 per cent since 1992, consumer expenditure has grown by 10.5 per cent. But concern over job security and the lack of the feel-good factor have led to a drip-feed approach to spending on small indulgent luxuries, such as chocolate, takeaway meals, magazines and the cinema.
We now spend almost as great a percentage of our income on gambling, since the launch of the National Lottery, as we do on school fees, including parental contributions to student grants.
Cinema attendance has gone up by 53 per cent over the past five years, consumption of convenience food has increased by 32 per cent and sales of male toiletries by 37 per cent.
The British Lifestyles report calls the phenomenon "the hidden recovery". It reports that credit is fuelling what is regarded as a mini-boom, helped by the ease of borrowing terms in the high street.
But the feel-good factor still eludes Britons. Few consumers feel that they are becoming more affluent, for which the report thinks there are several reasons.
Low inflation means that while wages may have risen in real terms consumers, used to big absolute increases, do not regard them as high enough to go on a spending spree.
Continuing worries about job security discourage consumers from committing themselves to buying items which require large amounts of money, but they are prepared to spend on indulgence products instead as a reward for being financially prudent, or to cheer themselves up after a bad day at work.
They shrink from the kind of expensive home improvements and large-scale borrowing that marked the Eighties' boom.
Home ownership is also seen as a powerful arbiter of how people view their own personal affluence. A decade ago, home ownership accounted for 40 per cent of net personal wealth. Today the figure is nearer 25 per cent. This is due to a higher proportion of money being tied up in assets such as life assurance and pension funds, which now account for one-third of all personal wealth. As a result, most people do not feel as "well off" as in the past.
The biggest concern for 20- to 34-year-olds is money limiting their lifestyle, though for 35- to 54-year-olds this is superseded by health.
Areas that are likely to see good rates of growth in the long term included spending on domestic help and garden help, which have increased by 294 per cent over the past 10 years, medical insurance, which is up by 190 per cent, and education - up 293 per cent.
Men, particularly, are having to adapt to a changing society where more people live alone instead of moving from the parental home to the marital home. Only 12 per cent of men do not usually shop for groceries, but they are still more disorganised and depend on the availability of stores with long opening hours.
Men are also more likely to eat takeaways because they cannot be bothered to cook, and convenience foods now account for one-quarter of in-home food sales. People are also eating out more, with 25 per cent claiming to eat out regularly.
British Lifestyles 1997; Mintel, 0171 606 6000; pounds 995
Where we spend our cash
% of % change
expenditure current terms
1996 1986-96 Domestic & garden help 0.9 +294
Educational fees 1.4 +293
Secondary vehicles 0.6 +239
House purchase 13.9 +221
Cinema 0.1 +210
Sickness & accident
insurance 0.5 +210
Medical insurance 0.4 +190
Gambling (losses) 1.3 +189
Recorded music &
musical instruments 0.9 +177
Source: MintelReuse content