Financial Services Commission 2030 Advisory Group "Need to Improve Fees for Youth Income Deduction Long-Term Funds"

Youth Leap Account Lump Sum Should Be Linked with Other Policy Products
Financial Education Needed for Youth's Real-Life Needs

The Financial Services Commission's 2030 Advisory Group proposed to the financial sector that "there is a need to improve the fee and commission structure of the Youth Income Deduction Long-term Fund." The FSC 2030 Advisory Group was launched last November in line with the current government's commitment to reflect the perceptions of the younger generation across national policies.

On the 24th, the FSC held a 'Dialogue between Youth and the Financial Sector' at the Seoul Jung-gu Community Finance Promotion Agency, discussing the strengthening of youth financial education and asset formation support. At the dialogue, the 2030 Advisory Group stated, "There is a need to improve the fee and commission levels of the Youth Income Deduction Long-term Fund." The Youth Income Deduction Long-term Fund is a product that allows a 40% deduction on contributions up to 6 million KRW annually. It is available to youths aged 19 to 34 with a personal income of 50 million KRW or less. The original subscription deadline was until the end of this year. However, the financial authorities have announced plans to extend the deadline in the second half economic policy direction.

The Korea Capital Market Institute responded to this suggestion by proposing improvements to the Financial Investment Association's fund comparison and disclosure website to make it easier for youths to compare information related to the Youth Income Deduction Long-term Fund. They also analyzed that "if the financial sector adjusts fund fees, it would reduce investment costs for young subscribers, effectively increasing investment returns."

The FSC 2030 Advisory Group also expressed the opinion that "specialized educational content is needed for major financial issues that youths face in real life, such as housing lease education."

Additionally, they called for measures to enhance the asset formation support effect of the Youth Leap Account. There was also an opinion that "it is necessary to strengthen cooperation with local governments or consider linking the lump sum formed after maturity with other policy products."

Kim So-young, Vice Chairman of the FSC, stated, "It is essential to provide financial education and support financial products specialized for the youth so that young people do not focus solely on short-term high returns, avoid excessive leverage and concentration in high-risk assets, and can steadily build assets through rationally diversified asset management from a mid- to long-term perspective."

She added, "We will promote financial education and discuss improvement measures together with the government, related agencies, the financial sector, and youth to better meet the demands of users for policies such as the Youth Leap Account and the Youth Income Deduction Long-term Fund."

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