"One Big Shot in Life? Gotta Pay Off Debt" Lotto Store Front Crowded with 20s and 30s

The Proportion of 2030 Age Group Among New Car Owners Steadily Increased Over 4 Years
The Share of Loan Amounts for Youth Also Rose by 12.9%p in the Same Period
Due to Job and Housing Price Burdens... "No Big Expectations but 'Just in Case'"

As the debt ratio among people in their 20s and 30s has surged, lottery sales among the youth have also increased. This is interpreted as young people turning to lotto and lotteries due to the harsh realities of jobs and housing prices.

[Asia Economy Reporter Kim Jung-wan] "These days, I can't even think about buying a house with the lottery," "I have debt, so I'm trying to pay it off."

As the debt ratio among people in their 20s and 30s surges, it is easy to see young people purchasing lottery tickets. The popularity of lotteries, considered a 'recession-type product' that sells more during tough economic times, is interpreted as reflecting a harsh reality of society.

Loans among the youth have been steadily increasing. According to the report "Current Status of Domestic Household Debt Risk and Proactive Management Measures" released by the Korea Institute of Finance in June last year, household loans among those aged 30 and under have been rising continuously and rapidly.

The proportion of young borrowers among new household loan recipients in the financial sector steadily increased from 49.5% in 2017 to 51.9% in 2018, 56.4% in 2019, and 58.4% in the third quarter of 2020. In terms of loan amounts, the youth share also rose by a total of 12.9 percentage points, from 42.4% in 2017 to 46.5% in 2018, 52.4% in 2019, and 55.3% in 2020.

Household loans among young people have been increasing at a rapid pace.
[Image source=Yonhap News]

According to the Bank of Korea's "December 2021 Financial Stability Report," as of the end of 2021, the share of loans held by people in their 20s and 30s accounted for 27.1% of the total household loan balance, an increase of 2.2 percentage points compared to the end of 2019. This simple calculation translates to an increase of 106.2 trillion won, placing a repayment burden similar to that of middle-aged groups.

Additionally, data obtained by Rep. Yoon Chang-hyun of the People Power Party from the Financial Supervisory Service shows that in the first half of last year, the total debt service ratio (DSR) for those under 20 was 28.9%, 33% for those in their 30s, and 35.6% for those in their 40s, showing little difference between young and middle-aged groups. Among bank accounts exceeding a DSR of 40%, the youth accounted for 32%, surpassing the 40s (28.3%) and 50s (22.6%).

The problem is that compared to middle-aged groups in their 40s and 50s, people in their 20s and 30s have incomplete asset formation and relatively low average income levels, resulting in insufficient repayment capacity. In fact, the Bank of Korea's earlier report analyzing the correlation between rising interest rates and the potential contraction of youth consumption found that 11.3% of borrowers aged 30 and under are reducing consumption due to loan principal and interest repayments.

The average monthly lottery purchase cost for people in their 20s increased by 313.8%, from 295.9 won in 2019 to 1,224.5 won last year.
[Image source=Yonhap News]

There is also a view that university students struggling to find jobs after COVID-19 and young workers facing difficulties in buying their own homes are turning to purchasing lotteries like Lotto. According to Statistics Korea, the average monthly lottery purchase cost for household heads in their 20s increased by 313.8%, from 295.9 won in 2019 to 1,224.5 won last year.

Choi (27), a contract worker, recently started purchasing Lotto (online lottery) regularly. Choi said, "It's like reaching for the stars to get a permanent job, so I keep buying just in case," adding, "It's hard to find a decent job, life isn't easy, and I already have debt, so I want to hold onto even a small hope."

Jang (33), an office worker, said he has been buying lottery tickets regularly since planning his wedding recently. Jang said, "After deciding to get married and looking into loans and house prices, I feel empty and burdened," adding, "I don't have high expectations, but I buy them for fun rather than not buying at all."

Experts interpret this phenomenon as uncertainty about the future leading to lottery purchases. They view it as young people turning to lotteries and similar products because it is practically difficult to achieve things like jobs and homeownership through actual effort in society.

Popular culture critic Jung Deok-hyun analyzed, "Because it is not easy to accumulate wealth or improve one's life through conventional means, people tend to spend some money on speculative methods." He added, "(Regarding house prices, etc.) since there is practically little one can achieve through actual effort in society, people find temporary consolation through purchasing," concluding, "It is not a good phenomenon."

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