[Yonhap News photo]

The spending growth rate of the elderly has doubled that of the younger generation, leading to record-high overall consumption expenditure.

According to the National Data Office, as of 2023, the total consumption expenditure of individuals aged 65 and over reached 243.8 trillion won, marking a record high with a 12.0% (26.1 trillion won) increase compared to the previous year.

The proportion of elderly consumption to the total consumption also reached a record high of 16.7%.

The consumption growth rate for the "working-age population" (aged 15-64), which accounts for 70.7% of total consumption, was only 6.3%. The "child population" (aged 0-14) saw a growth of 4.3%.

Over 60% of the elderly's consumption, amounting to 150 trillion won, was in private spending, a 14.9% increase from the previous year. This refers to consumption directly paid for by individuals, not public consumption such as welfare and healthcare provided by the government.

Specifically, among private spending, "other consumption" such as leisure, culture, and dining out increased significantly, rather than healthcare spending primarily focused on medical expenses, according to the National Data Office.

This indicates a noticeable increase in spending related to quality of life beyond medical bills.

The elderly are found to consume based on their own assets, in addition to pensions, welfare, and family support.

The elderly's consumption (243.8 trillion won) significantly exceeds their labor income (64.6 trillion won).

This lifecycle "deficit" (179.2 trillion won) is covered through public and private transfers, and redistribution of private assets.

Among these, private asset redistribution recorded a record high of 49.3 trillion won last year.

Private asset redistribution is a concept that includes not only income generated from assets such as interest and rent, but also the amount used for consumption by reducing savings or disposing of assets.

It can be seen as an indicator of how much the elderly are utilizing their assets as a source of consumption.

An official from the National Data Office explained, "It's not simply the effect of population increase due to baby boomers entering the elderly demographic," adding, "In terms of per capita spending, it is reasonable to consider the elderly as emerging as a major consumer group."

However, significant generational gaps were observed even within the elderly population.

59.3% of the total elderly consumption and 68.5% of private asset redistribution were concentrated among those aged 65-74. This means that "younger elderly" with relatively more assets and higher activity levels accounted for the majority of consumption and asset utilization.

Differences in asset accumulation levels and economic situations at retirement age between generations appear to have led to this disparity.

Yonhap News