South Korea's debt crisis deepens as young households struggle under extreme burdens
The number of high-risk households in South Korea has surged, with younger people bearing the brunt of the crisis. By March 2025, over 459,000 families struggled under extreme debt burdens, spending nearly half their income on loan repayments alone. The problem is growing fastest among those in their 20s and 30s, raising concerns about long-term financial stability. High-risk households are defined as those unable to repay debts even after selling all assets. According to the Bank of Korea, these families have a debt service ratio above 40% and a debt-to-asset ratio over 100%. Their total financial debt reached 96.1 trillion won ($63.9 billion) by early 2025.
The issue has spread rapidly in recent years. Between March 2024 and March 2025, more than 80,000 additional households fell into this category. Younger households now make up a significant portion, with those led by people in their 20s and 30s accounting for 34.9% of all high-risk cases. The trend is particularly noticeable outside Seoul, where the number of affected families continues to climb. While no detailed regional comparisons exist, the overall share of high-risk households nationwide stood at 4.0% as of March 2025.
The rise in high-risk households highlights growing financial strain, especially among younger generations. With debt levels reaching record highs, many families face severe challenges in managing basic expenses. The situation calls for closer monitoring as economic pressures persist across the country.
