The 'Youth Tomorrow Savings Account,' aimed at supporting asset formation for low-income youth, is experiencing a significant decline in enrollment. Over the past year, the number of new participants has dropped by more than 30%, leaving hundreds of millions of won in unused government support funds.
On October 22, Rep. Heo Jong-sik of the Democratic Party, a member of the National Assembly's Health and Welfare Committee, revealed data from the Korea Employment and Welfare Development Institute during a parliamentary audit. Last year, only 29,638 new participants joined the Youth Tomorrow Savings Account, a sharp decline of 31.8% from the previous year's 43,484.
The exodus is particularly pronounced among youth from middle-income households. New sign-ups for those exceeding the lower-middle-income threshold, defined as 50-100% of the median income, plummeted from 15,347 in 2024 to just 4,300 last year, a staggering drop of 72.0%. This decline far exceeds the 9.9% decrease seen among those below the lower-middle-income threshold.
Experts attribute this enrollment crisis to conflicts with similar policies. The Financial Services Commission's 'Youth Future Savings' program overlaps with the Youth Tomorrow Savings Account, leading to a complete halt in new recruitment for higher-income youth starting this year, which is expected to further accelerate the program's decline.
As the number of applicants dwindles, a significant portion of the allocated budget is going unused. Last year, 38.7 billion won remained unspent and was either carried over or returned, with 38 billion won reclaimed by local governments. As of the end of September this year, 36 billion won of the total deposit of 267 billion won remains unspent.
There are also numerous cases of individuals who opened accounts but later abandoned them. Among the 2023 participants (47,970) reaching the three-year mark, only 73.6% (35,320) received the full government support. Approximately 26.4%, or over 12,600 individuals, either canceled their savings or withdrew only their contributions without receiving government funds. Nearly 3,000 participants are at risk of losing their support as the grace period approaches its end.
The Youth Tomorrow Savings Account allows working low-income youth to save over 100,000 won monthly, with the government matching contributions with an additional 100,000 to 300,000 won, potentially yielding up to 14.4 million won plus interest after three years.
Rep. Heo stated, "The fact that enrollment has dropped by a third in just one year, with hundreds of millions in support funds left unspent, indicates that the program is not effectively reaching youth. We need to examine whether there are gaps in support as higher-income youth transition to the Youth Future Savings program and actively utilize the annual surplus budget to expand enrollment and prevent early withdrawals."
* This article has been translated by AI.
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