The Higher the Monthly Payment for the Youth Leap Account, the Lower the Cancellation Rate

Total Subscribers 1.4 Million... 10% Cancellation Rate

As the Youth Leap Account, introduced to support the mid- to long-term asset formation of young people, has passed its first year since launch, it was found that 6 out of 10 subscribers reside in the Seoul metropolitan area. In addition, the higher the monthly payment amount, the lower the proportion of early cancellations.

According to the 'Youth Leap Account Subscription and Operation Status' requested by Rep. Kang Min-guk of the People Power Party from the Financial Supervisory Service on the 26th, as of the end of last month, the number of subscribers was confirmed to be 1.4 million, with total payments amounting to 7.1989 trillion won.

Looking at the scale of new subscribers by month, March saw the highest number of new subscribers at 355,000, with account openings totaling 1.5676 trillion won.

By region, the proportion of subscribers in the Seoul metropolitan area reached 58%, accounting for more than half. Gyeonggi-do had the largest number of subscribers at 387,000 (1.9897 trillion won), followed by Seoul (347,000 subscribers, 1.8368 trillion won) and Incheon (89,000 subscribers, 450.9 billion won).

From July last year, when Youth Leap Account subscriptions began, to July this year, the total number of early cancellations over one year was 144,000, with an early cancellation rate of 10.2%. The total amount of canceled funds was recorded at 428.3 billion won.

It was found that the higher the average monthly payment amount, the lower the early cancellation rate. Among those paying 700,000 won, the number of early cancellations was 2,000, with the lowest cancellation rate of 0.4%, followed by the 600,000 won range (3,000 cancellations, 4.2%) and the 500,000 won range (8,000 cancellations, 6.1%). For payments under 100,000 won, the cancellation rate was the highest at 45.3% (45,000 cancellations).

The amount of government contributions recovered was 9.2 billion won, with a recovery rate of about 2.1%. According to special contracts and business agreements, government contributions paid are recovered when early cancellations occur in the Youth Leap Account. Since there are no separate regulations on how to handle the recovered amount, it is reserved at the Korea Inclusive Finance Agency as a nominal fund for contribution payment preparation.

Rep. Kang Min-guk stated, "The subscription retention rate of the Youth Leap Account is around 90%, which is expected to help the universal asset formation of young people," and added, "Financial authorities need to prepare measures to address operational issues and handling plans for recovered contributions to further reduce the early cancellation rate of the Youth Leap Account in the future."

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