The second round of applications for the Youth Future Savings Plan began on October 7. This plan follows the Youth Hope Savings (launched in 2022) and the Youth Leap Account (launched in 2023) as a key government initiative for youth asset formation. The Youth Future Savings Plan addresses concerns about the 5-year maturity of the Leap Account by shortening the subscription period to 3 years and increasing the government contribution to a maximum of 12% of the deposit amount. Thus, the maturity period has been shortened while government support has increased. How have the benefits perceived by young people changed throughout the transition from Hope Savings to Leap Account to Future Savings?
Maturity Reduced from 5 Years to 3 Years, Contribution Limit Lowered from 700,000 to 500,000 Won; Support Rate Increased to 12%
The most significant change in the Youth Future Savings Plan is the reduction of the maturity period to 3 years. While the previous Leap Account had a 5-year maturity, the government has responded to feedback indicating that a long-term commitment is burdensome by shortening the subscription period to 3 years.
The burden of a 5-year maturity was evident during the operation of the Leap Account. According to the National Assembly's Legislative Research Service, the early termination rate of the Leap Account rose from 8.2% at the end of 2023 to 15.9% by the end of 2024, nearly doubling in just one year.
In response to the challenges of long-term commitments, the government introduced measures to alleviate the burden during the operation of the Leap Account. If a subscriber maintains their account for more than 3 years but terminates early, they can still receive tax benefits and 60% of the government contribution. If they maintain it for over 2 years, partial withdrawals are allowed within a certain range of the principal. The Youth Future Savings Plan has taken this long-term commitment burden into account by reducing the maturity period to 3 years.
The monthly contribution limit has been lowered from 700,000 won in the Leap Account to 500,000 won, aligning it with the Hope Savings Plan. However, the government support rate has increased. The Future Savings Plan offers a standard type with 6% support and a preferential type with 12% support. Compared to the Leap Account, which matched government contributions of 3% to 6% based on individual income, the maximum support rate has doubled. The previous Youth Hope Savings provided 2% of the first year's contributions and 4% of the second year's contributions as a savings incentive at maturity.
In monetary terms, if a participant contributes the maximum of 500,000 won monthly for 3 years, they can receive 1.08 million won in government contributions for the standard type and 2.16 million won for the preferential type. The government contributions for the Leap Account ranged from 21,000 won to 33,000 won per month, with a maximum support amount of 1.98 million won over 5 years. The Hope Savings Plan allowed for a maximum of 360,000 won over 2 years. Notably, the preferential type of the Future Savings Plan offers more government contributions over 3 years than the maximum amount available from the Leap Account over 5 years. Thus, the Future Savings Plan has reduced the contribution period and monthly limit while increasing government support.
Leap Account Holders Can Switch to Future Savings
Existing holders of the Leap Account can also switch to the Future Savings Plan. While dual subscriptions to both products are not allowed, terminating the Leap Account to enroll in the Future Savings Plan will be recognized as a special early termination, allowing participants to retain their previous government contributions and tax benefits. Financial authorities will provide additional opportunities for Leap Account holders to switch during this second recruitment round.
However, while the Leap Account allows for a maximum monthly contribution of 700,000 won over 5 years, the Future Savings Plan is structured for a maximum of 500,000 won over 3 years. The decision on which plan is more beneficial will depend on the remaining subscription period, monthly savings capacity, and eligibility for the preferential type of Future Savings.
Standard Type for Income Under 60 Million Won; Preferential Type for Small Business Employees
The Youth Future Savings Plan is divided into standard and preferential types based on income level and employment status. Both types target youth aged 19 to 34, but there are differences in individual and household income criteria.
The standard type is for individuals with a total salary of 60 million won or less (or comprehensive income of 48 million won or less) or small business owners with annual sales of 300 million won or less, provided their household income is at or below 200% of the median income. They receive 6% in government contributions.
The preferential type is for individuals with a total salary of 36 million won or less (or comprehensive income of 26 million won or less) who are employed by small to medium-sized enterprises or small business owners with annual sales of 100 million won or less, provided their household income is at or below 150% of the median income. The support rate is double that of the standard type at 12%. However, new employees in small businesses can receive preferential benefits even if they meet the standard income criteria.
Compared to the previous Leap Account, the maximum allowable personal income cap remains at a total salary of 75 million won, but the household income criteria have become stricter. Under the Leap Account, households could qualify with an income of up to 250% of the median income, but to receive government contributions under the Future Savings Plan, the standard type requires 200% or less, and the preferential type requires 150% or less. Young individuals with a total salary exceeding 60 million won can still enroll but will only receive tax benefits without government contributions. However, for dual-income households, the household income criteria are relaxed to 250% for the standard type and 200% for the preferential type.
Young Households Have More Debt Than Savings
The government's support for youth asset formation began in earnest with the announcement of the 'Special Measures for Youth' by relevant ministries in August 2021. Following this initiative, the government launched the Youth Hope Savings Plan in February of the following year, continuing support through the Leap Account and the Youth Future Savings Plan. Unlike the Youth Tomorrow Savings Account, which is a welfare program aimed at helping low-income youth achieve self-sufficiency, these products are financial tools designed to support asset formation for youth who meet certain income criteria.
The government's ongoing support for youth asset formation is crucial due to the vulnerable asset conditions faced by young people compared to other generations. An analysis of the 2025 Household Financial Welfare Survey by the National Assembly's Legislative Research Service revealed that the average assets of households headed by individuals under 39 years old amount to 314.98 million won, which is only 55.6% of the overall average of 566.78 million won, the lowest among all age groups. The value of real estate holdings is also low, at 164.18 million won, which is one-third of the 461.31 million won held by those in their 50s.
Debt burdens are even heavier. The debt-to-asset ratio for young households stands at 30.3%, approximately 1.8 times the overall average of 16.8%. The ratio of financial debt to savings is 131.1%, making them the only age group with a ratio exceeding 100%. This indicates that they have more debt than savings.
The Legislative Research Service explains, “While income sustains monthly living expenses, assets provide a foundation for responding to crises such as unemployment or illness and for investing in opportunities like education, housing, and entrepreneurship.” The government's asset formation policy, which adds incentives or contributions to the amounts deposited by youth, aims to help them build initial assets more quickly.
Supporting Youth Without Savings Remains a Challenge
The approach of adding government support to personal savings is consistent across all three products. The Legislative Research Service points out, “Current support programs are all predicated on personal savings, meaning that youth without any income to save cannot enroll in the first place.” If they terminate their accounts early, they risk losing government contributions and tax benefits. This implies that the support effects may be concentrated among youth who have the capacity to save.
The Youth Future Savings Plan has reduced the maturity period from 5 years to 3 years to lessen the burden of long-term commitments. The remaining challenge is to engage youth with insufficient savings capacity into the program and ensure that enrolled youth can maintain their accounts until the 3-year maturity.
* This article has been translated by AI.
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