High-income groups' consumption ratio at its lowest in four years... Bonuses also show no effect

The proportion of income spent on consumption among the high-income group has fallen to its lowest level in four years. This is mainly because, although income has increased due to factors like Mid-Autumn Festival bonuses, actual consumption has not kept pace.

According to the “Q4 2025 Household Trends Survey” released by the National Statistical Office, the average consumption propensity of the top 20% high-income group is 54.6%. This is a 0.4 percentage point decrease from the same period last year and the lowest since 2021. The average consumption propensity refers to the proportion of household income spent on consumption and is also an indicator of disposable income utilization.

Especially in the fourth quarter of 2024, consumption propensity dropped sharply, with income increasing by 3.7% while consumption decreased by 0.3%, indicating a significant slowdown in consumption. The high-income group’s average monthly disposable income was 9.361 million won, a 5.0% increase from last year. This growth was mainly driven by labor income increases, such as bonuses from large corporations, which rose by 8.7%.

Because the growth rate of consumption did not keep up with income growth, the nominal consumption expenditure of the high-income group only increased by 4.3%. Although this exceeds the overall average consumption growth rate, it remains relatively low compared to income growth. As a result, the surplus funds, or savings balance, reached 4.25 million won, a 5.9% increase.

This phenomenon indicates that income growth has not directly translated into increased consumption, especially among the high-income group. According to a report from the Bank of Korea, high-income individuals tend to allocate a relatively low proportion of their increased income to consumption, and this proportion has even declined in recent years. Economic experts believe that the income growth of high-income groups is likely mainly used for savings or investments in real estate, stocks, and other assets.

In the future, this downward trend in consumption may change due to factors like economic recovery and interest rate fluctuations, but in the short term, it seems difficult for high-income groups to significantly increase consumption. Therefore, the government and markets need to consider strategies to stimulate consumption among high-income earners.