Rising debt for youths in S. Korea

SEOUL — South Korea’s younger generation is facing rising debt while the older generation has less living costs, boosting worries about low birthrate amid an aging population, data showed on Thursday.

According to data jointly released by Statistics Korea, the Bank of Korea and the Financial Supervisory Service, householders aged under 30 have an average debt of 23.85 million won ($22,000) as of the end of March.

It was the lowest debt in the age group, but it marked the fastest growth rate of 41.9 percent compared with 16.81 million won tallied a year earlier.

Debts owed by householders in their 30s averaged 68.72 million won as of the end of March, up 16.1 percent from a year ago. It was the second-highest expansion in all age groups.

Household debt averaged 7,022,000 won for all ages as of end-March, up 4.5 percent from a year earlier.

Financial soundness worsened the most among those in their 20s and 30s. The ratio of financial debts to disposable income jumped by 23.2 percentage points in the cited period among householders aged under 30.

It was the fastest increase in the age group, followed by householders in their 30s who saw the ratio surge by 12.6 percentage points in the same period.

The growing debts facing the younger generation came amid mounting concern about a high unemployment rate.

The official jobless rate among youths aged 15 to 29 was 9.2 percent in November, but the sentiment rate including discouraged job seekers and those doing part-time jobs against their will stood at 21.4 percent last month.

Some local media said that almost half of college graduates failed to get a decent job for long periods even after graduation. Many college graduates were estimated to live on debts or live on part-time jobs to study and prepare to enter a big corporation.

Amid difficulties in finding a job, younger people delayed marriage and postponed having babies, dragging down the already low birthrate. Low birthrate will pull down the potential growth rate of the economy as it reduces the workingage population.

Meanwhile, the older generation struggled to get proper living costs after retirement. According to the data, nearly two thirds of after-retirement householders had difficulty because of lack of living costs.

About 40 percent of families having retired householders lacked proper living expenses, while 22.4 percent was very lack of appropriate living costs.

The least living cost for after-retirement households was estimated at 1.92 million won a month, while the proper living cost was estimated at 2.76 million won.

The expected retirement age of householders was believed to be 66.8 years old, but the actual retirement age was 62.1 years old on average, the data showed.