Koreans take out their first loans in their 20s to cover university tuition and borrow more in their 30s to buy a home, while a person would have to save up all of their earnings for 11 years to afford an adequate apartment in Seoul, a study suggests.
Shinhan Bank analyzed the financial status of 10,000 Korean income earners and published the study on Thursday.
It found that one in three people in their 20s borrowed an average of W13 million to cover university tuition, and half of those in their 30s took out loans to buy homes (US$1=W1,132). Among 30-somethings who borrowed money to buy homes, loans covered almost half the cost.
Supposing the average household earns W4.68 million a month, it would take them 10.9 years to buy a 100 sq.m apartment in the capital if they spend nothing and save up every penny.
A massive 72.7 percent of households are indebted, with an average debt of W50.7 million.
Over the past three years, the average cost of getting married was W91 million per person-- W103.1 million for men and W72 million for women -- and more than two-thirds of that cost was shouldered by the couple's parents. That means 47.6 percent of parents of the couple shoulder a heavy financial burden into their twilight years.
Households with children in middle or high school spend W790,000 a month on private tuition, and as a result they are poorly prepared to make ends meet after retirement.
The study showed that 30 percent were not saving up for their twilight years, and even those who did only saved W230,000 a month on average, which is just 4.9 percent of the W4.68 million in average monthly household income.
Double-income households, which account for 65.3 percent of married couples, earn W5.86 million a month on average, which is only W1.02 million more than single-income households (W4.84 million).