[단독] “By 2030, the lump sum is tied up for 5 years and the benefits are minimal”… Youth Leap Account, flood of early cancellations

It was found that 1 in 10 subscribers to the Youth Leap Account, which aims to build assets for young people as a key government task, cancels the account early. Despite system improvements such as strengthening subscription benefits, the number of new subscribers is showing a decline after a brief rebound. The number of cancellations is increasing day by day. Some are pointing out that the government is only increasing the budget without improving the problems in the system.

According to data submitted by the office of Democratic Party of Korea lawmaker Kim Hyun-jung, a member of the National Assembly’s Political Affairs Committee, from the Financial Services Commission on the 24th, the number of people who canceled their Youth Leap account was 161,000 as of August, with a cancellation rate of 11.2%. As of August, the number of new subscribers was only 38,000, and the cumulative number of new subscribers was 1,438,000. The cumulative number of subscribers originally proposed by the Financial Services Commission was 3 million.

The Youth Leap Account is a policy financial product that allows you to make a lump sum of up to 50 million won by freely depositing within 700,000 won per month for 5 years. Young people who are 19 to 34 years old as of the date of account opening and who meet the requirements of having a total personal income of 75 million won or less in the previous tax period can join. It is designed to raise financial resources of up to 50 million won by combining bank interest and government contributions.

The problem is that the government’s system to attract more young people to the Youth Leap Account is less effective. The government introduced various improvement measures in January as the early cancellation rate approached 9.5% and the number of new subscribers dropped from 253,000 at the beginning of introduction to the 30,000 range.

In January, childcare leave benefits were recognized as personal income, and in February, those whose Youth Hope Savings Expiration expired were allowed to link to the Youth Leap Account, and marriage and childbirth were added as special reasons for early termination. In March, the household income standard was improved from 180% of median income to 250%, and military service members’ pay was also recognized as personal income.

Accordingly, the number of subscribers rebounded briefly in February and March, but then faded again. New subscribers soared 294.9% and 130.5% in February (154 million) and March (355 million), respectively, compared to the previous month, but fell again from April (167 million), falling to the 30,000 range. The early cancellation rate also fell from 9.5% in January to 7.3% in March, but increased again from April (7.8%) and reached a maximum.

Rep. Kim said, “Despite the fact that the Youth Leap Account is a major government task, there is no survey of new subscribers and no discussion on increasing the subscription rate.” He added, “The government is not coming up with any significant improvement measures, and the budget is not adequate after investigating the system’s insufficiencies.” “It should be used to help young people steadily build assets,” he said.

The Korea Inclusive Finance Agency’s Youth Leap Account budget increased from 367.8 billion won in 2023 to 368.2 billion won this year, and 375 billion won is scheduled to be allocated in 2025.

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