Youth Future Savings second round draws 688,000 applicants, less than a third of first round; 1.7 trillion won budget increase sets no target number

SEOUL

Applicants in the second round of Youth Future Savings totaled 688,000. The Financial Services Commission and the Korea Inclusive Finance Agency announced the results of second-round applications received from Oct. 7 to 16 in a press release on Oct. 19. The figure is less than a third of the 2.343 million who applied in the first round in June and July. In the first round, 796,000 applicants failed screening, and more than half of them were caught on household member consent and document issues. The government submitted to the National Assembly a budget plan setting next year's Youth Future Savings program funding at 1.7 trillion won, but did not say how many young people the money would support.

Second round draws 688,000, far short of first round's 2.343 million

According to the commission, of the 688,000 second-round applicants, about 558,000 applied as general income earners, 108,000 as employees of small and medium-sized enterprises and 21,000 as small business owners. From the second round, applicants chose their own enrollment type. By age, 232,000 (33.7%) were 19-24, 233,000 (33.9%) were 25-29 and 223,000 (32.4%) were 30 or older. Eligible applicants were those born between Nov. 17, 1991, and Nov. 27, 2007, with up to six years of military service excluded from age calculations.

The pace of applications differed from the first round from the start. In the first round, applicants reached 1.012 million at 1 p.m. on June 26, the fifth day of applications, and a cumulative 2.012 million at 1 p.m. on July 2. The second round accepted applications from Oct. 7 to 16 but drew only 688,000.

Cumulative applicants this year total 2.819 million. The commission arrived at this figure by removing duplicate applicants from the combined 3.03 million in the first and second rounds. More than 200,000 young people applied in both rounds. The commission did not break down whether they were applicants rejected in the first round or young people who passed screening but did not open accounts.

Second-round applicants will undergo enrollment screening from Oct. 19 to Nov. 13. Preliminary screening results will be sent between Oct. 30 and Nov. 2, and objections will be accepted from Nov. 2 to 5. Both schedules are provisional. Final screening results will be sent individually to applicants on Nov. 12-13. Those who pass must open accounts on the apps of participating institutions from Nov. 16 to 27, excluding weekends. Accounts cannot be opened after this period. The Oct. 19 press release gave the screening period inconsistently, as "10.12-11.13" in the title and "10.19-11.13" in the body and schedule table.

About one in three first-round applicants failed screening

On June 26, when first-round applications passed 1 million, the commission said, "We plan to operate it so that all young people among applicants who meet the eligibility requirements can enroll." First-round results came out on Aug. 11. Of the 2.343 million who applied from June 22 to July 3, about 1.547 million passed screening. First-round screening ran from July 6 to 24, and account opening from July 27 to Aug. 7. Final enrollment was about 1.385 million, roughly 160,000 fewer than those who passed screening. By type, 983,000 (70.9%) enrolled in the general type, 389,000 (28.1%) in the preferential type and 12,000 (0.9%) without government contributions. By age, those 25-29 were the largest group at about 524,000 (37.8%), followed by 30-34 at about 510,000 (36.8%) and 19-24 at about 290,000 (20.9%). The commission said it received 8,300 inquiries about additional enrollment.

The reasons the 796,000 failed screening were also disclosed. The largest group, 409,000, did not obtain household members' consent to verify income information or did not submit household member verification documents. Those who did not meet individual income requirements numbered 211,000, and those who exceeded household income criteria 165,000. More than half of those rejected were caught not on income but on consent and document procedures. The commission said young people who did not complete the household consent procedure in the first round could reapply and be screened during an additional enrollment period.

Before the launch, the government stressed that there would be no document burden. In materials for an April 23 launch preparation meeting, the commission said screening would be conducted without separate documents by linking computer systems with the Ministry of the Interior and Safety, the Ministry of SMEs and Startups, the National Tax Service and others. Financial Services Commission Chairman Lee Eog-weon handed out coffee to young commuters in Seongsu-dong, Seoul, on the morning of June 22, the launch day, and explained how to enroll. Lee said he expected Youth Future Savings to establish itself as a policy product that would be "a reliable partner in asset building and a ladder of hope." Lee also said, "We designed it so that most procedures can be carried out easily on mobile without submitting complicated documents." In actual screening, household members' consent to verify income information was required. In its August first-round results, the commission listed the household members subject to household screening as father, mother and minor siblings. The second-round guidance included a provision allowing applicants to submit a family relations certificate if household members were difficult to determine.

Commission revised procedures before second round, but household consent remains

The commission announced how the second round would operate in two press releases, on Sept. 16 and Sept. 30. Applicants would select for themselves whether they work at a small or medium-sized enterprise, and this would be checked against the Korea Inclusive Finance Agency's screening results. Preliminary screening results would be sent before final results, with an opportunity to explain if the enrollment type came out differently. It also decided to send advance reminders at each step and to pursue expanding web servers and call center staff. Young people applying as small business owners must obtain a small business confirmation certificate before applying, and those with two or more places of business need certificates for all of them. Issuance takes about seven days on average, and if a certificate is not issued before the objection deadline, the applicant is screened on comprehensive income rather than sales. Young people who re-enroll after terminating Youth Future Savings early receive the government contribution rate multiplied by "(36 months - previous enrollment period)/36 months." Periods during which payments were suspended also count as enrollment periods.

The structure of assessing household income with household members' consent did not change. Eligibility requires total wages of 75 million won or less, or annual sales of 300 million won or less for small business owners, along with household income at or below 200% of the median. Earners with total wages above 60 million won and up to 75 million won receive only tax exemption on interest income, without government contributions. The preferential type is for young people with household income at or below 150% of the median who are SME employees with total wages of 36 million won or less or small business owners with annual sales of 100 million won or less.

The commission said second-round applications were not on a first-come, first-served basis. On Oct. 7-8, an odd-even system based on the last digit of the birth year was applied, and from Oct. 12 anyone could apply. The same materials also said KakaoBank would accept applications for only up to 100,000 accounts during the second-round recruitment period.

Government first launched three-year product adding 6-12% contributions in June

Youth Future Savings is a policy savings product under which the government adds a contribution of 6% (general type) or 12% (preferential type) of deposits when young people aged 19-34 deposit up to 500,000 won a month for three years. Interest income is tax-exempt. The base interest rate is 5% at all participating institutions and fixed for three years. Preferential rates of up to 3 percentage points are offered by NongHyup, Shinhan, Woori, Hana, IBK, KB Kookmin and Korea Post, and up to 2 percentage points by Suhyup, iM, Busan, Kwangju, Jeonbuk, Kyongnam and Kakao. A common preferential rate of 0.5 percentage point applies to young people with total wages of 36 million won or less, and 0.2 percentage point to those who complete financial counseling.

The commission gave an example assuming a 7% interest rate: on principal of 18 million won, the general type pays 21.1 million won, adding a 1.08 million won contribution and 2.02 million won in interest, and the preferential type pays 22.27 million won. There are 14 participating institutions. Twelve institutions wishing to participate, including Toss, attended the April review meeting. At the time of the May interest rate disclosure, Toss Bank's product launch was set for December according to its system development schedule. Early termination in principle forfeits contributions and tax benefits, but reasons such as death, emigration, retirement, business closure and illness are recognized as special early termination. Preferential-type subscribers must have worked at SMEs for a total of at least 29 months by one month before maturity, and may change jobs only twice during the enrollment period. Young people who were subject to comprehensive financial income taxation even once in the preceding three years cannot enroll. After enrollment, there is no rescreening of whether income or sales are maintained.

Military personnel were also included. The commission and the Ministry of National Defense said on June 8 they would allow officers, noncommissioned officers and enlisted soldiers undergoing basic military training to apply and open accounts by smartphone at training centers. It can be held together with the Soldiers' Tomorrow Preparation Savings or the Long-term Officer Leap Savings. However, since Youth Future Savings has a three-year maturity, payments must continue after discharge.

The government set a target launch around June 2026 at a meeting of relevant ministries and agencies chaired by Kim Jin-hong, director general for financial consumers at the commission, on Sept. 12, 2025. The meeting was attended by the Ministry of Economy and Finance, the Ministry of Employment and Labor, the Ministry of SMEs and Startups, the Korea Federation of Banks and the Korea Inclusive Finance Agency. "Coordination and cooperation among agencies is essential," Kim said. The commission at the time put the maturity payout, excluding interest, at 19.08 million won with 6% support and 20.16 million won with 12% support. It said the scale of funding would be finalized through the National Assembly's budget review and tax law revisions. The 2026 budget finalized in December that year newly included 744.6 billion won for Youth Future Savings. The press release on the finalized budget at the time did not state how many people the budget would support.

The recruitment schedule also changed several times. In its April review meeting materials, the commission said it would recruit twice a year after launch, in June and December. The June 22 launch materials also gave the second-round enrollment period as "December 2026 (provisional)." When first-round results were announced in August, it said it was considering an additional enrollment period in September, and second-round applications ultimately began on Oct. 7.

Government's 1.7 trillion won budget plan includes scrapping income requirements for general type

President Lee Jae-myung presided over "Youth Budget Unboxing 2027" at the Chungmu Room of Cheong Wa Dae on Aug. 28. Releasing its fiscal 2027 budget plan on Sept. 1, the commission said, "We have reflected 1.7 trillion won in program funding for Youth Future Savings in the budget plan." The commission's budget plan for next year is 9.2417 trillion won, up 4.5901 trillion won (98.7%) from this year. Of this, 3.5 trillion won is for program budgets related to the Future Response Fund, including the National Growth Fund and Youth Future Savings.

In the "Comprehensive Investment Strategy by Youth Growth Stage," which the government announced at the same time, the youth budget rises 53.5% from 28.2 trillion won this year to 43.3 trillion won in next year's government plan. The government said that, assuming a first child born in 2027 in a provincial preferential area to parents with income at 100% of the standard median, support available up to age 34 would total up to about 195.82 million won. The government matches 100% of up to 550,000 won a month deposited by young people in military service into the Soldiers' Tomorrow Preparation Savings. The commission's budget plan for next year also includes 146.5 billion won for a new Our Child Independence Fund, opened in a child's name from birth to age 18, and 88.3 billion won for youth housing ladder support.

The budget plan includes completely scrapping the individual and household income requirements for the general type. The commission said it had expanded the scope and scale of support "so that all young people can enroll and receive benefits." The contribution rate for the preferential type rises from 12% (up to 60,000 won a month) to 15% (up to 75,000 won a month). A new track will be created supporting 25% of the subscriber's own deposits for young people working at SMEs located in the provinces.

In this year's first round, 211,000 were rejected on individual income criteria and 165,000 on household income criteria. If the budget plan passes the National Assembly, the general type will be open from next year to young people who had been blocked by income requirements. The commission's budget plan press release contains no projected number of subscribers to be supported with the 1.7 trillion won, only the 1.385 million subscribers since launch.

Retroactive benefits for existing subscribers and third round left to National Assembly

The commission said it plans to apply the expanded contribution benefits retroactively to this year's subscribers. However, it said, "The retroactive procedure will be pursued after contribution rates and other matters are finalized through the National Assembly's budget review, reflecting them." Expanding eligibility to all young people will also apply from 2027 recruitment after National Assembly approval. The third round will proceed after the budget is finalized and the enrollment screening system and the Restriction of Special Taxation Act and its regulations are revised. The commission did not disclose the timing of the third round. The Oct. 15 materials said that if the budget plan passes the National Assembly, general-type contributions would be paid retroactively to existing subscribers with total wages above 60 million won and up to 75 million won who had received only tax exemption on interest income.

Youth Leap Account subscribers are also eligible to switch. The two products cannot be held at the same time. To switch, applicants must first open a Youth Future Savings account and then terminate the Youth Leap Account through "special early termination for the purpose of enrolling in Youth Future Savings." Once the special early termination is completed, deposits into Youth Future Savings can be made from 9 a.m. on the next business day. If the account is not terminated within the period, no money can be deposited into Youth Future Savings and the Youth Leap Account remains. In that case, the blocked Youth Future Savings account must be closed, and the applicant can reapply only two months later. The Oct. 19 press release does not say how many second-round applicants are Youth Leap Account subscribers.

Youth Leap Account disclosed even its termination rate, but no estimate of eligible population for Youth Future Savings

As of Oct. 30, 2024, 1.52 million people had opened Youth Leap Accounts. The commission at the time estimated the eligible youth population at about 6 million and said about one in four eligible young people had enrolled. It said the retention rate as of the end of September, the 15th month after launch, was 88%, with 1.28 million of 1.46 million account holders continuing payments. It put the early termination rate at 12%, comparing it with an average of 55% for ordinary commercial bank installment savings products and 23% for Youth Hope Savings.

On Dec. 26 the same year, the commission announced expanded contributions for the Youth Leap Account. From January 2025 payments, the maximum monthly contribution rose from 24,000 won to 33,000 won. New subscribers in 2024 totaled 1.06 million, and cumulative subscribers at year-end 1.57 million. The 2025 budget for the Youth Leap Account was 347 billion won.

The commission's press releases in the four months since the launch of Youth Future Savings contain no estimate of the eligible youth population and no early termination figures. Nor do they show how many of the 1.385 million first-round subscribers are continuing payments.

Sources (KST)

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