South Korea is facing a growing crisis of elderly debt, with a record number of people over the age of 60 seeking debt restructuring as high interest rates and inflation erode their financial stability. The number of individuals in their 60s undergoing debt adjustment procedures has surged, increasing by 93% over the past five years, according to data from the Korean financial authorities.
As of late September, over 115,000 individuals had applied for debt restructuring this year, a figure nearing last year’s total of 167,370, according to a report by the National Assembly’s Political Affairs Committee, based on data from the Credit Recovery Committee. The trend is particularly pronounced among those aged 60 and over, with their debt defaults increasing significantly.
The surge in debt among the elderly is attributed to a combination of factors, including job losses, rising living costs, and the economic fallout from high interest rates. Many retirees find themselves facing a “post-retirement income shock,” struggling to maintain their living standards on limited pensions, and savings. The amount of debt being adjusted is also at an all-time high, reflecting the severity of the financial strain on this demographic.
According to data released by Representative Lee Kang-il of the Democratic Party, the number of individuals aged 60 or older undergoing personal debt restructuring increased from 115,815 in 2020 to 174,841 in 2024, an 82.6% increase. During the same period, the total amount of debt reduced through restructuring rose from 1.06 trillion won to 1.7153 trillion won, a 61.8% increase. From January to July of this year, 101,759 individuals had their debts restructured, with a total reduction of 1.195 trillion won.
The situation is particularly acute in cities with a high concentration of elderly residents, such as Busan, where financial safety nets are showing signs of strain. Financial institutions are reporting a growing number of elderly customers unable to repay their loans, leading to an increase in applications for debt relief programs. The increase in debt restructuring among the 60+ age group (82.6%) significantly outpaces that of other age groups: 54.8% for those under 20, 46.7% for those in their 30s, 43.1% for those in their 40s, and 46.9% for those in their 50s.
Representative Lee Heon-seung of the People Power Party has called for an expansion of financial safety nets for the elderly, emphasizing the necessitate for tailored support measures to address their unique financial challenges. The Credit Recovery Committee offers various debt adjustment programs, including rapid debt adjustment, pre-workout plans, and individual workout plans, designed to assist individuals regain financial stability.
The growing number of elderly individuals facing financial hardship raises concerns about the long-term sustainability of the social security system and the potential for increased poverty among seniors. As of late September, the number of individuals undergoing debt restructuring was 115,721, representing approximately 70% of the total for the previous year. Authorities anticipate that the final figure for 2024 will be comparable to last year’s record high.
