SEOUL, Feb. 15 (Korea Bizwire) – South Korea’s national pension service is considering lending money to singles who delay or are reluctant to tie the knot because of wedding costs as a way to promote marriage and help raise chronically low birth rates, officials said Sunday.
South Korea is faced with mounting demographic problems as the ultra-low birth rate and the rapidly aging population are expected to seriously shrink the size of the labor force and depress economic growth. Such changes are also pressing on the pension operators who have to deal with increasing payments for the elderly while revenue drops.
The National Pension Service (NPS), under the wing of the Ministry of Health and Welfare, has been considering a wedding loan for singles, or those of a marriageable age, to support their housing plans, the biggest part of wedding costs, and other expenses.
In a fund management meeting in December, Health Minister Moon Hyung-pyo suggested using some of the pension funds on loans for singles to improve the welfare of young subscribers and reap higher returns from the loan businesses, according to ministry officials.
The state-run pension has been operating a silver loan scheme, assigning about 1 percent of the fund, or 124 billion won (US$112.7 million), to lend to the elderly and support their welfare programs.
The government has been seeking to encourage childbirths, mulling measures to support housing costs and improve job security among young people.
South Korea’s fertility rate stood at 1.19 children in 2013, the lowest among advanced economies, according to Statistics Korea. This compares with 1.45 in 2000 and 1.57 in 1990.