"96% Goes to Living Expenses"... The Wealthy Keep Nearly Half

Bottom 20% of households by income have just 4.4% left; top 20% retain 46.8% of their income.

Households with lower incomes had little money left to save after covering living expenses, while better-off households were able to save their surplus and build wealth. The wealth gap between them has continued to widen, according to the data.

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According to the Ministry of Data and Statistics' 2025 Survey of Household Finances and Living Conditions, average net assets per household stood at 471.44 million won as of the end of March 2025, up 5.0% from a year earlier. Net assets are calculated by subtracting debt from total assets. By contrast, net assets among households in the bottom 20% by income fell 4.9%.

The top 10% of households by net assets accounted for 46.1% of total household net assets, up 1.6 percentage points from a year earlier. This means that nearly half of all net assets were concentrated among the top 10% of households.

Experts have pointed out that low-income households struggle to cover living expenses, while high-income households can put a substantial portion of their income toward savings and investments, widening the wealth gap.

According to the Korea Institute for Health and Social Affairs' study, "Discrepancies Between Income Distribution and Perceived Distribution in Korea," households in the bottom 20% by income spent 95.6% of their current income on living expenses, taxes, and social insurance premiums in 2023. They had just 4.4% of their income left over. By contrast, households in the top 20% spent 53.2% of their current income and kept 46.8%. Not only was their income higher, but they could also devote a much larger share of it to savings and investments. This difference in capacity to save led to differences in asset accumulation. Even when incomes rise by the same rate, the gap in "actual capacity to invest" is bound to be enormous.

Rising real estate prices have also been cited as a factor widening the wealth gap. In its study "Research on Inequality: Focusing on Income and Assets," the Korea Development Institute (KDI) identified real estate as a key driver of growing asset inequality. The assets of households that owned homes increased as prices rose, while households without homes faced the need to save more money to buy one. The study found that the wealth gap was affected not only by whether a household owned a home, but also by whether it owned a home in the Seoul metropolitan area.

Other factors that widened the gap between those who held assets and those who did not included whether they owned stocks and the size of their investments.

The distribution of income and assets also moved in different directions over the long term. KDI found that income inequality eased as the income share of the bottom 75% increased, while asset inequality worsened as the share held by the top 25% rose.

More recently, income distribution has also deteriorated again. In the latest Survey of Household Finances and Living Conditions, the Gini coefficient for equivalized disposable income rose to 0.325 in 2024, up 0.002 from a year earlier. The Gini coefficient shows how evenly income is distributed. The closer it is to 0, the smaller the income gap; the closer it is to 1, the larger the gap. An increase in the Gini coefficient means income distribution worsened from the previous year.

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