Survey indicates serious level of wealth disparity

Loans to households headed by those under age 30 or over 60 are on a rapid increase, a government survey showed Friday. The study also showed a significant level of wealth disparity, as households in the top 20 percentile owned 59 percent of total assets in the country.

According to a survey of some 20,000 households across the nation by the Bank of Korea, the Financial Supervisory Service and the Statistics Korea, the average household assets totaled 333.64 million won (303,190 U.S. dollars) as of the end of March this year, up 2.1 percent from a previous year. Real estate accounted for 67.8 percent of the assets.

With the increase in assets, household debts rose, too. The amount of average household debts totaled nearly 60 million won (54,530 dollars) at the end of March, up 2.3 percent from a year earlier. Nearly 69 percent of the household indebtedness were financial liabilities, while the remainder was security deposits for rented real estate. The liabilities of household heads under 30 years of age increased 11.2 percent year-on-year to 15.6 million won (14,178 dollars), while those at aged 60 or older had nearly 43.7 million won (39,716 dollars) in debts, up 4.1 percent from a year earlier. The statistics suggest that young people without jobs and elderly citizens with insufficient incomes depended on debts for living.

Nearly 72 percent of the households with financial debts said they found it "burdensome" to repay the principals and interest. They spent 21.5 percent of their disposable incomes to service their debts, up by 2.4 percentage points from a year earlier. By age and profession, people in their 50s and self-employed ones owned the largest amounts of assets and debts.

In terms of household assets, those belong to the top 20 percentile owned assets worth an average 98.2 million won (892,484 dollars), or nearly 59 percent of total household assets. In contrast, households in the bottom 20 percentile owned just 1.7 percent of total assets, revealing a clear income bipolarization.

The Gini index based on the latest survey stood at 0.302, lower than the 0.307 of last year, indicating decreased income inequality. The index is an indicator of income inequality. A higher value means greater inequality.

The average household income totaled 46.76 million won (42,534 dollars) in 2013, up 4.4 percent from the previous year. Despite the income increase, households` consumption rose by just 0.2 percent in 2013 year-on-year, indicating that increased taxes and utility bills left them with less money to spend for consumption.