As South Korea faces an aging populace, the nation is grappling with a growing economic and legal issue: the significant amount of assets owned by individuals suffering from dementia, which are typically kept out of reach and unused.
These so-called “dementia money” holdings—tied up in real estate, bank accounts and other financial instruments—are raising concerns about stalled consumption, legal disputes, and vulnerability to fraud.
A homemaker known only as A finds herself at the center of this escalating problem. Her senior father received an early diagnosis of dementia last year.
Initially, his condition was relatively minor, but once he started venturing beyond the house, she reluctantly decided to admit him to a care facility earlier this year.
She explained that the true difficulty lies in the fact that all of her father’s assets are tied up in accounts solely under his name. “Every month, I must cover the expenses for the nursing home, yet I am unable to access funds from his accounts at will,” she stated. She admitted being unsure about how to proceed.
Her situation is not an isolated one. A government-initiated research project has shown for the first time that the aggregate wealth owned by senior citizens in South Korea affected by dementia—which they refer to as “dementia funds”—totaled 153.5 trillion won ($110 billion) by 2023.
The results were derived from the Ageing Society and Population Policy study, carried out in partnership with the National Health Insurance Service and Seoul National University’s Health Finance Center. This amount constitutes approximately 6.4% of the nation’s gross domestic product.
Authorities stated that they initiated the inquiry to gain a deeper understanding of how age-associated asset freeze measures affect the economy.
Countries such as Japan, which started experiencing population aging before we did, are now encountering social issues related to dementia funding,” the committee stated. “We initiated this research to monitor the problem more methodically and develop an adequate policy reaction.
Experts caution that the issue extends beyond just finances—it can also impede wider economic activities. “If assets become immobilized due to dementia, they cease to be utilized or transferred,” explained Joo Hyung-hwan, who serves as the vice chair of the committee. “This prevents individuals from using or investing this money, thus disrupting the circulation within the entire economy.”
The study indicates that South Korea was home to approximately 1.24 million citizens aged 65 or more who were living with dementia in 2023, constituting around 2.4% of the overall populace. Among them, nearly 62%, which amounts to about 760,000 people, possessed assets, averaging around $143,400 per person. Even though they represent just a fraction of the population, these individuals cumulatively own assets amounting to 6.4% of the country’s gross domestic product.
Upon examining this asset distribution more closely, additional complexities become apparent. Approximately 74.5%, equating to around $81.7 billion, was locked into real estate, making it challenging to convert into cash prior to the owner’s passing or transfer of ownership. Additionally, about 21.7%, totaling roughly $23.9 billion, consisted of various financial assets like savings and investment holdings.
Moreover, these figures are anticipated to increase significantly. According to projections from the committee, the count of individuals suffering from dementia could climb to approximately 1.79 million by 2030, around 2.85 million by 2040, and close to 4 million by 2050.
As they grow, their total assets are expected to skyrocket—reaching $157.7 billion in 2030, climbing to $251.6 billion in 2040, and surging to $349.8 billion by 2050. This final amount would account for 15.6% of the anticipated gross domestic product of the nation.
Receiving a dementia diagnosis does not automatically prohibit an individual from managing their finances. Nonetheless, practically speaking, this task often becomes exceedingly challenging.
In South Korea, financial institutions typically demand the direct participation of the account holder for any transaction. This requirement can prevent even immediate family members from accessing the necessary funds, particularly when these funds are critically required for medical purposes.
Furthermore, financial activities conducted by individuals with dementia may face challenges in court later because these actions could be contested due to doubts about their mental competence at the time of transaction. This uncertainty places numerous families in a precarious legal position and essentially renders funds “locked” or inaccessible according to several specialists’ descriptions.
“Dementia funds often go unnoticed and can sometimes be considered wasted resources,” stated Hong Sok-chul, director of the Health Finance Research Center at Seoul National University, who was one of the key figures in conducting this research.
The increasing risk of financial fraud adds another layer of worry. Individuals experiencing a decline in cognitive function become more susceptible to criminal activities like voice phishing and identity theft due to their vulnerability.
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