Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Frequent policy shifts leave young Koreans frustrated with savings programs
A promotional poster for the Youth Leap Account, a savings plan for young Koreans introduced during the Yoon Suk Yeol administration from 2022 to April this year, hangs on the wall as consultants take calls from applicants at a call center in Seoul, Sept. 15, 2023. Yonhap
By Yi Whan-woo
Park Young-min and his elder brother, Young-lim, both in their 30s, illustrate how frequent changes in savings policies with each new government leave young Koreans frustrated about how to plan for their financial future.
In 2018, Young-lim, employed at a small and medium-sized enterprise (SME), signed up for the Youth Tomorrow Savings, a government-backed initiative first introduced during President Park Geun-hye’s 2013-17 term and later expanded under President Moon Jae-in, who led the country from 2017 to 2022.
By contributing 6 million won over three years, Young-lim received a total payout of 30 million won ($21,000), thanks to matching support from both the government and his employer.
The program was introduced to help young SME workers build financial stability while encouraging long-term employment.
Young-min, however, started working at an SME in 2023, shortly after the Youth Tomorrow Savings plan was discontinued.
As an alternative, he enrolled in the Youth Leap Account introduced by President Yoon Suk Yeol’s administration, which spanned from 2022 to April this year.
This program offered fewer benefits and required a longer five-year commitment, making it a far less attractive option.
Now, with the Youth Future Savings plan set to launch in 2026 under incumbent President Lee Jae Myung, Young-min remains skeptical about yet another policy shift.
“It’s hard to know what to expect anymore,” he said. “By the time you get used to one program, the next government replaces it.”
A key campaign promise of Lee’s, the Youth Future Savings plan aims to offer subscribers an additional amount equivalent to 25 percent of savings at maturity, which lasts from one to three years.
It will replace the Youth Leap Account, which will shut down on Dec. 31 this year.
However, whether many young Koreans will actually benefit — or even bother enrolling — remains uncertain, according to analysts.
They point out that details are still under negotiation among relevant ministries, while the growing financial burden on the government amid mounting national debt could delay implementation.
“Each administration seems more interested in introducing its own branded program than in building continuity,” Noh Min-seon, a senior researcher at the Korea SMEs & Startups Institute, said.
The researcher emphasized that savings policies should focus not on short-term participation, but rather on long-term planning and stability.
“Young Koreans feel like they’re being forced to chase moving targets, as programs change names, rules are rewritten and benefits disappear without convincing explanations,” Noh added.
Citing data from the National Assembly Budget Office, the researcher noted that dropout rates from the Youth Leap Account rose from 8.2 percent in 2023 to 15.3 percent as of April this year, during the Yoon administration.
Speaking on condition of anonymity, an economist at a private think tank shared a similar view.
“The programs need to reconnect and build on one another to ensure sustainability,” he said. “That sustainability is especially critical, given the persistent labor shortages at SMEs, driven by young Koreans’ preference for higher-paying jobs and better welfare benefits at large conglomerates.”
He suggested that, if the government faces budget constraints, it should consider targeted support for specific groups — such as skilled professionals — rather than rolling out universal programs.