NH Investment & Securities’ 100-Year Era Research Institute released a new report on the middle class, “THE100 Report No. 133,” on September 16.
Looking only at income, 52.9% of households in South Korea qualify as middle class.
But after examining consumption and savings, assets and debt, and preparations for later life, that proportion fell to 24.6%.
3-Line Summary
1. NH Investment & Securities introduced new criteria for the “true middle class”
2. The income middle class shrank from 52.9% to 24.6% when measuring the true middle class
3. The dividing line is not income but preparation for later life
The Proportion Shrinks Each Time Another Condition Is Added
The Organisation for Economic Co-operation and Development (OECD) classifies people as middle class when their income adjusted for household size—equivalized disposable income—falls between 75 and 200% of the median value for the overall population. Applying this standard to data from the 2025 Household Financial Welfare Survey by the National Data Agency, the median household income in South Korea was 3744 ten thousand won per year, and the middle-class income range was 2808 to 7488 ten thousand won per year. Divided by household size, one-person households had to fall between 234 and 624 ten thousand won per month, while four-person households had to fall between 468 and 1248 ten thousand won per month to be within this range. Based on income alone, 52.9% of all households were middle class.
The institute did not stop there and added consumption expenditure and savings capacity. Although 66.1% of households engaged in “middle-class-like consumption,” spending at least 75% of median consumption expenditure, the proportion of households satisfying all three conditions—income, consumption, and savings—fell to 39.9% once the additional condition of being able to save at least 10% of disposable income after consumption was applied. Finally, households had to satisfy at least two of three “future sustainability conditions”—net assets, debt repayment burden, and preparation for later life—to be classified as the “true middle class.” Only 24.6% of households passed this final stage. Just 8.0% of households satisfied all six conditions without exception.
The True Middle Class Earns 631 Ten Thousand Won and Spends 319 Ten Thousand Won per Month
The median disposable income of households that passed these criteria was 7572 ten thousand won per year, or approximately 631 ten thousand won per month. Median consumption expenditure was approximately 319 ten thousand won per month. The asset gap was also clear. Median net assets were 4억1705만원, 1.74 times the median for all households, 2억3860만원, while financial assets totaled 1억1230만원, far more than the 6312만원 held by all households. The proportion living in their own homes was also 72.5%, above the overall average of 57.9%.
Although the true middle class had a higher average debt balance, 1억29만원, than the overall average of 9534만원, its annual principal and interest repayments were 993만원, actually lower than the overall average of 1328만원. This means that they were managing their repayment burden at a lower level relative to their income and assets, rather than being debt-free.
Preparation for Later Life Is the Weakest Link
By age group, the proportion of the true middle class was highest among people in their 40s and 50s, at 30.5% and 31.2%, respectively, before dropping sharply to 25.3% among people in their 60s and 10.5% among those aged 70 or older. This reflects the difficulty of maintaining the conditions as income declines after retirement. By region, households in the capital area had more income and assets than those outside the capital area, but their average debt, 1억2094만원, was greater than the 7032만원 recorded outside the capital area. As a result, the proportion of the true middle class in the capital area was 23.5%, actually lower than the 25.7% outside the capital area.
Preparation for later life was the biggest obstacle. Among households that had not yet retired, only 9.6% said they were “well prepared” for later life, while 55.6% of already-retired households said their living expenses were insufficient or very insufficient. When the institute recalculated the figures using stricter criteria for preparation for later life, the proportion of the true middle class fell to 14.9%. Research Fellow Kim Jin-woong pointed out that the standard for the middle class should shift from “how much you earn” to “how long you can maintain that lifestyle.”
References
Tags #MiddleClass #TrueMiddleClass #NHInvestmentAndSecurities #100YearEraResearchInstitute #HouseholdFinancialWelfareSurvey #IncomeMiddleClass #NetAssets #PreparationForLaterLife #SavingsCapacity #AssetManagement #OECDMiddleClassCriteria #EquivalizedDisposableIncome #DisposableIncome #FinancialAssets #RetirementPreparation