Foreigners shift from sending money to families back home to saving for themselves

Finance

Published: 22 Jul. 2024, 16:03 Updated: 22 Jul. 2024, 17:55

Foreigners shift from sending money to families back home to saving for themselves

Pedestrians cross a road to head to work during the morning rush hour in central Seoul on May 16. [YONHAP]

Young foreigners in Korea are increasingly prioritizing saving their incomes for themselves, a shift from the older generation of breadwinners who typically sent their money to their families back home.

A report by BC Card published on Monday analyzed the overseas remittance and spending patterns of 1 million foreign residents in collaboration with Global Money Express (GME).

According to the report, the proportion of the amount of money sent to family members — including spouses, parents and siblings — was 58 percent in the first half of 2021, but dropped to 49 percent during the same period this year.

In the first six months of 2021, siblings accounted for 25 percent of the total recipients, parents 19 percent and spouses 14 percent. This year, siblings took up 19 percent, parents 15 percent and spouses 15 percent.

The analysis was based on user information collected by GME Remittance, as the app requires its users to identify the sender's relationship with the recipient, such as themselves, parents, spouses or friends.

Meanwhile, the amount sent to oneself, which took up 15 percent of the total in 2021, steadily rose during the cited period to 18 percent in 2022 and 21 percent in 2023. This year, the figure reached 25 percent.

“Most foreign workers in Korea are millennials or Gen Z, meaning that their inclination to focus on their own well-being seems to have played a part in the trend in overseas remittance,” suggested a GME spokesperson.

“While older generations used to send money [earned in Korea] mainly to support their families, the younger generation is now saving their incomes for their futures.”

According to GME, 81 percent of foreign workers using overseas remittance services were salaried employees. The majority, at 63 percent, were in their 20s or 30s, with men accounting for 68 percent of all senders.

Moreover, foreign residents in their 20s and 30s were responsible for 57 percent of the total value of card spending, and 64 percent of the number of payments using cards in the first half of this year at 3.5 million stores affiliated with BC Card in Korea.

By region, South Jeolla saw the sharpest increase in the number of card payments, logging a 29 percent on-year increase during the January-June period this year, followed by 23 percent in South Gyeongsang and 22 percent in Gangwon, while the nationwide average stood at 12 percent.

The amount of spending also increased most rapidly in South Jeolla at 19 percent, compared to the nationwide average of 7 percent. South Gyeongsang and Gangwon reported a 13 percent jump.

South Gyeongsang saw a 29 percent on-year surge in the number of foreign workers in the region during the first quarter of this year, according to the Ministry of Employment and Labor. South Jeolla and Gangwon both experienced a 27 percent increase.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]