Pension savings in South Korea surpassed 198 trillion won last year, approaching the 200 trillion won mark. The influx of funds into pension savings accounts, particularly pension savings funds, has significantly improved both the total savings and returns, driven by a booming stock market.
According to the "2025 Pension Savings Investment White Paper" published on June 18 by the Financial Services Commission and the Financial Supervisory Service, the total amount in pension savings reached 198.2 trillion won at the end of last year, an increase of 19.3 trillion won (10.8%) from the previous year’s 178.9 trillion won. The growth rate has accelerated, rising from 4.9% in 2023 to 6.5% in 2024, and reaching 10.8% in 2025.
The use of pension savings has also expanded overall. Contributions last year amounted to 13.5 trillion won, an 18.1% increase from the previous year. The number of contracts rose to 10.796 million, up 11.1%, while the number of participants grew to 8.403 million, a 10.0% increase. Notably, new contracts surged by 51.9%, totaling 1.443 million.
The most significant change has been the rapid growth of pension savings funds. The total amount in these funds reached 61.3 trillion won, an increase of 20.6 trillion won (50.7%) over the year. Their share of total pension savings rose from 22.7% in 2024 to 30.9% last year, reflecting a trend of new enrollments and transfers from other products to funds due to the favorable stock market conditions.
Returns have also seen substantial improvement. The annual return for pension savings products in 2025 was recorded at 10.6%, up 6.9 percentage points from the previous year’s reported rate of 3.7%. In particular, the annual returns for funds and exchange-traded funds (ETFs) stood out at 29.3%, with funds yielding 31.3% and ETFs 27.4%. The recent one-year return significantly exceeded the five-year average of 10.3% and the ten-year average of 8.8%. In contrast, the cumulative return for insurance products was only 0.8%, while the annual return for trusts was around 4.0%.
Financial authorities cautioned that withdrawing the principal and investment income after receiving tax deductions may be considered as non-pension income, incurring a penalty tax of 16.5%. They advised individuals to choose products that suit their personal circumstances based on the characteristics of each option.
* This article has been translated by AI.
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