Families have raided £23 billion from long-term savings in the past year in what is reported to the most dramatic such shift in spending patterns on modern record.
Analysis of Bank of England figures by Sky News found the equivalent of £900 per household was diverted to current accounts in the 12 months to October.
Another £21 billion has been retained for day-to-day spending which might previously have been put away - as people face both squeezed budgets and record-low interest rates.
The switch is the most significant since comparable records began in the 1970s and has cancelled out a rise in savings during the recession, it was reported.
Simon Ward, chief economist at Henderson Global Investors, said it was part of a "virtuous circle" that was seeing economic recovery fuelled by increased consumer spending.
"Households have been running down their savings accounts balances, probably in reaction to the pathetic interest rates now on offer," he told Sky News.
"Increased spending is lifting growth and incomes, and money is flowing back to other households, in a virtuous circle."
Bank of England figures put the average interest rate for long-term savings at 2.4%, the lowest since 1999, the report said.