6 Million One-Person Households Era... The Biggest Concern Is "Whether to Continue Economic Activities"

12 out of 100 People Say "I Live Alone"

[Asia Economy Reporter Park Sun-mi]South Korea has entered an era of 6 million single-person households, with 12 out of every 100 people living alone, and it is projected that about 150,000 households will increase annually over the next five years. The biggest concern for single-person households is whether their economic power will be sustained. They believe that 570 million KRW is needed for retirement and that 1.23 million KRW per month should be invested or saved, but the actual amount saved monthly is only about 60% of that.

"By 2047, single-person households will exceed 30%"

According to the ‘2020 Korea Single-Person Household Report’ published on the 8th by KB Financial Group, which comprehensively analyzed the lives of single-person households in Korea, the number of single-person households in Korea in 2020 was about 6.17 million, meaning 12 out of every 100 people live alone. It is projected that single-person households in Korea will increase by about 150,000 households annually over the next five years, and by 2047, the proportion of single-person households will exceed 30% in most regions nationwide.

Regarding the motivation to start living alone, voluntary responses (42.5%) were higher than involuntary (39.9%) and neutral (17.6%). The proportion of people who expect to continue living alone for more than 10 years was 44.1%, up from 34.5% in 2018 and 38.0% in 2019. The longer people live alone, the more they tend to expect their single-person lifestyle to continue long-term.

The intention to marry among single-person households declined compared to the previous year, especially among men in their 30s and women in their 20s. About 60% expressed satisfaction with living alone, with women showing higher satisfaction than men, and overall satisfaction was found to be greatly influenced by housing satisfaction.

The biggest concern for single-person households is 'whether economic activity can be sustained'

The biggest worry while living alone is 'whether economic activity can be sustained.' Especially among female single-person households, economic activity sustainability was ranked as the top concern across all age groups from 20s to 50s. It is also notable that concerns about safety and risk have increased due to the spread of COVID-19. In the past, men cited ‘loneliness’ as their biggest worry, but this year ‘health’ has taken priority, reflecting a shift in concerns after COVID-19.

The spread of COVID-19 has also made the individualistic tendencies of single-person households more pronounced. Leisure activities for single-person households have shifted from outdoor activities to those that can be done at home due to COVID-19, resulting in a decrease in socially oriented activities. Single-person households who can use their time alone after work showed various activities last year, but this year, cases of going straight home after work have increased, and drinking or visiting public facilities has significantly decreased. Feeling the threat of COVID-19, 56.5% reported spending time and money near their homes.

Regarding housing ownership types among surveyed single-person households, the order was monthly rent, jeonse (long-term deposit lease), and owned homes, with about half expressing an intention to purchase a home. Although single-person households have a relatively high subscription rate to housing subscription savings, they tend to be cautious about applying due to concerns such as insufficient points. The availability of residential facilities usable alone by single-person households living in non-apartment housing varies greatly depending on the area, and the presence of such facilities is highly correlated with life satisfaction. Single-person households in their 20s and 30s prefer full-option housing even if it requires a certain cost, and many are taking self-help measures such as installing security devices to ensure residential safety.

Consumption and financial life of single-person households?

Single-person households spend half of their income on living expenses, with a high proportion spent on food and housing costs. Among single-person households whose consumption decreased after the spread of COVID-19, spending was reduced in the order of food, leisure shopping, and savings/investment. This year, online purchases increased significantly compared to the previous year, and there was a high willingness to use subscription services and rentals that fit the single-person lifestyle.

Along with this, as products and services targeting single-person lifestyles have diversified, experience and interest in single-person specialized products have increased. The rational consumption orientation of single-person households has strengthened further compared to the previous year, and they actively use secondhand transactions. Surveyed single-person households reported an increase in eating alone compared to the previous year, with about 30% of total meals being eaten hastily. Also, the use of ready-to-eat meals increased compared to the previous year, and when dining out, preferences included not only ‘consideration for one person’ but also ‘places with fewer customers,’ indicating that COVID-19 has influenced the eating habits of single-person households.

The financial assets of single-person households have changed in composition due to COVID-19, with the proportion of savings and deposits decreasing compared to the previous year, while the proportion of cash and investment assets such as stocks increased. Along with this, more than half of respondents used cash without re-depositing after canceling financial products. Younger age groups showed a higher willingness to newly invest in stocks. About 40% of respondents were found to have loans, with the proportion of borrowers slightly decreasing compared to the previous year.

High interest in stocks and other investments among single-person households
Pay services are a major payment method

This year, interest in investment among single-person households has generally increased, with new investments in stocks and funds and interest in public offerings and overseas stocks. Many see the market changes caused by COVID-19 as an opportunity. 64.8% responded that they newly invested in stocks or funds, and 54.2% expressed interest in overseas stocks, exceeding half. 48.7% said they became interested in public offerings.

Despite the ongoing low-interest-rate environment, there was strong interest in event-based savings and deposits. 25.6% reported having experience subscribing, and 9.4% tried to subscribe but failed due to limited sales or other reasons. Even those who did not subscribe but showed interest accounted for 27.9%.

Credit cards remain the most used payment method for expenditures, but their usage proportion continues to decline, while pay service usage has grown significantly. QR code payment experience is highest among people in their 20s at 49.7%, followed by 30s (40.8%), 40s (32.7%), and 50s (24.3%).

Saving about 60% of the investment and savings amount considered necessary monthly

Single-person households expect to retire at an average age of 62, with women anticipating retirement about 2.3 years earlier than men. They believe about 570 million KRW is needed for retirement, and on average, they are preparing 22% of that amount, while 16% responded that they have no retirement funds at all. Single-person households say that 1.23 million KRW per month is needed for investment and savings for retirement, but the actual amount invested or saved is about 740,000 KRW, which is about 60% of the needed amount.

The level of retirement fund preparation varies greatly by income bracket, with low-income groups still lacking the capacity to save after covering basic living expenses.

However, savings among single-person households increased slightly compared to the previous year. While most prepare retirement funds through savings and deposits, responses indicating preparation through investment products and insurance increased compared to the previous year. Compared to multi-person households, many single-person households, who have fewer year-end tax deduction items, are preparing for old age by receiving tax benefits through pension savings or IRP (Individual Retirement Pension).

This content was produced with the assistance of AI translation services.