Two years ago, Lee Mo (28) joined the Youth Leap Account and was recently pleased to hear that government support had increased, but soon became significantly disappointed. Although the news emphasized the increase in benefits, she learned that the additional support does not apply to the money she has deposited in the account until now. Lee said, "After using the calculator, I found that I'm receiving about 170,000 won less than those who joined this year," and sighed, adding, "It’s unfair that some receive more and some less based on when they joined, even though it’s not a private product but a government policy."
The benefits of the Youth Leap Account, a key pledge of the Yoon Suk-yeol administration in the financial sector, have been strengthened starting this year. The Financial Services Commission attempted to retroactively apply the enhanced benefits to existing contributions to increase youth financial support, but the Ministry of Strategy and Finance opposed and thwarted this plan. Among existing account holders, voices of discontent have emerged, stating, "Those who responded to government policy first end up receiving fewer benefits."
According to the financial sector on the 19th, the Financial Services Commission decided last year to expand government contributions to the Youth Leap Account and pursued a plan to apply the enhanced benefits retroactively to existing contributions. The Financial Services Commission first announced its intention to increase contributions to the Youth Leap Account in October of last year. At that time, the Commission designed the policy based on a plan to retroactively apply the increased contributions to all past deposits.
However, the Ministry of Strategy and Finance put the brakes on the Financial Services Commission's push for retroactive application of contributions. At that time, the Ministry reportedly felt a burden regarding budget increases and expressed opposition. They cited the rationale that 'even without retroactive application, not reducing the benefits communicated to initial applicants does not break trust.' Ultimately, the Financial Services Commission could not overcome the Ministry’s will during the preliminary budget review process.
The Youth Leap Account is a policy financial product in the form of a savings account. The biggest feature of this product is that the government supplements a certain contribution amount each month in proportion to the deposit amount made by the subscriber. Starting this year, the contribution support has been enhanced, increasing from a maximum of 24,000 won per month to 33,000 won, an increase of 9,000 won. Calculating with a five-year maturity, the maximum amount of contributions received has increased from 1.44 million won to 1.98 million won, an increase of 540,000 won.
With the failure of retroactive application, a difference in the actual contribution received will arise between existing and new subscribers. Assuming there are two young people pouring the same amount of money under the same benefit conditions, a person who joined the Youth Leap Account at its initial launch (June 2023) will receive a maximum of 171,000 won less in contributions at maturity than someone who joined in January of this year. Considering that bank interest applies based on the total amount of deposits and contributions, the actual difference in benefits widens further.
Meanwhile, as the Youth Leap Account is a core financial policy of the current government, it is reported that there was considerable regret within the Financial Services Commission regarding the failure of retroactive application of contributions. The government promised the launch of the Youth Leap Account among the 120 major tasks it identified at the early stage of President Yoon Suk-yeol's inauguration in July 2022.