A strong economy and a trend towards indulgence has meant that consumers are increasingly opting for high-end products, said the report.
"The rise of premium cosmetics and toiletries can certainly be linked to the growth in similarly indulgent foodstuffs and even the rise in the popularity of spa breaks and professional nail care salons. The cash-rich time-poor society prevalent in the UK is focusing on indulgence through premium goods and services," said the report.
The 4 per cent growth in the nation's cosmetics and toiletries markets for 2004 was also encouraged by new product development and the development of niches such as men's skin care products within the men's grooming segment, as well as nourisher and anti-age products within the skin care segment.
Another significant boost to the market came from the increasing popularity of the appliance of science in cosmetics products.
Consumers today "appear convinced that scientific formulas can make their lives, skin condition and teeth even better than last year's product launches could," said Euromonitor.
According to the report, manufacturers have been endorsing their products with ever-bigger claims, with the increased use of science as backing allowing them to hike retail prices for many products in hair care, skin care and oral hygiene.
However, women are most interested in science claims, with the more sceptical male population remaining unconvinced. As a result, manufacturers were forced to think laterally when extolling the virtues of their latest products to often suspicious male consumers, said the report.
Other factors that have had a significant impact on the market include the success of celebrity endorsements, as UK consumers follow their US counterparts in their thirst for celebrity information.
One of the best-selling fragrances in the UK in 2004 was Estée Lauder's Tommy Hilfiger True Star, which used pop star Beyoncé as its face and generated a great deal of interest in a label which was on a downward trend, according to the researchers.
The year also saw football captain David Beckham and rugby captain Jason Robinson signed up to promote Gillette products to men, in an increasingly popular move to use sports figures as a way of disassociating personal care products and femininity.
Natural products also faired well in the review period, with several major companies launching new products made with natural ingredients, including products by Elizabeth Arden, Estée Lauder and Procter & Gamble.
A further trend identified byEuromonitor was the increased focus on younger age groups. Last year saw the launch of a Chupa Chups branded fragrance by Coty targeted at the 'tween' population, as well as the repositioning of the long-selling Charlie range to appeal to even younger consumers.
Additionally, manufacturers are increasingly successful in encouraging women in their twenties to use anti-aging products as an early precaution against wrinkles.
"Expanding the consumer base to younger consumers served to introduce a large number of new consumers to these products, a process that is sure to be repeated across cosmetics and toiletries where applicable," said the report.