|▲It is the image of the bank and bankbook (Source: Yonhap News Agency)|
On February 21, 2022, the government officially launched a welfare policy called, "Youth Hope Savings," for young people. Youth Hope Savings are installment savings products that can be freely paid within the limit of 500,000 won per month. The age of subscription is from 19 to 34 years old as of the date of subscription, and subscription income is available, if the total salary from January to December 2021, is less than 36 million won or the total income is less than 26 million won. The representative advantages of the, "Youth Hope Savings," products are that it provides tax-free benefits for interest income and that the state provides savings incentives. This is similar to the general installment savings that have an annual interest rate effect of up to 10%. Compared to the average interest rate on installment savings products at commercial banks, it has a clear advantage to the participants.
The, "Youth Hope Savings,” operated a preview period from February 9 to 18, before its launch, to check the availability of subscriptions, through apps at each bank. During that period, about 2 million people flocked to 11 banks' mobile app services, some banks were delayed in accessing the app, causing a flood of applications for subscription. The budget for the, “Youth Hope Savings Project,” is 45.6 billion won, and assuming that all subscribers subscribe to the monthly payment limit of 500,000 won, only 380,000 people can be supported. As the above fact became known, the possibility of early closing on a first-come, first-serve basis was mentioned, and as a result, it seems that there was a flood of access. In response, the government implemented a five-step application system according to the year of birth from the 21st to the 25th to prepare for computer delays, caused by a flood of applications, and closed the application on March 4. We heard the story of Son Joo-young, a classmate who signed up for the Youth Hope Installment Savings.
Q. Please introduce yourself.
Son: I'm Son Joo-young, majoring in Financial Insurance.
Q. How did you get to know the Youth Hope Savings Program?
Son: I came across it first through the news and social media, and then my parents recommended for me to sign up and look for accurate information about the program.
Q. What is the purpose of joining the Youth Hope Savings Program?
Son: Due to unfavorable factors such as the Ukraine-Russia war and the U.S. Federal Reserve's interest rate hike, profits in the financial technology market were not guaranteed. In this situation, I decided to sign up because I thought it was a product that could make a stable profit.
Q. In what ways did you think that Youth Hope Installment Savings were better than other financial products?
Son: First of all, it was good that it was a high-interest product in the primary financial sector, as compared to other installment savings, and tax-free benefits also came as a big advantage. As I said earlier, I have recently suffered losses by volatility in the stock and coin markets, so I chose the Youth Hope Installment Savings Program, which can guarantee stability.
Q. Do you think youth welfare, including this Youth Hope Installment Savings Program, is actually going well?
Son: Personally, I think there are still a lot of regrets. Of course, I think it's great in that it informs young people, who focus on consumption rather than savings, about the importance and method of installment savings, which provides them with opportunities to save money. However, I think this is also a negative aspect in that not all young people can receive it, and there is a possibility of creating another side of separation (marginalization). Typically, there is an example of people who served as soldiers in their 20s receiving salaries, but their salaries are not set as income because they do not need to pay taxes, so they are excluded from the Youth Hope Installment Savings list. I recognize that within a welfare program, one that everyone can be satisfied with, is practically difficult, but I can't help feeling sorry for them.
After the product deadline on the 4th, the Financial Services Commission said it will discuss the possibility of resuming its business in July, in consultation with related ministries, such as the Ministry of Strategy and Finance. These days, in the era of low-interest rates, the number of young people jumping into various investments, such as stocks and coins, is increasing exponentially. Various youth welfare policies at the government level are urgently needed to prevent young people from being swept away by volatile markets.
By Seo Ji-min, cub-reporter email@example.com
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