SBI PO English Sectional Mock Test 07

1. Read the following passage carefully and answer the questions given after it. A worker in his twenties rarely thinks about old age. Retirement seems distant, wages are modest, and there are more pressing demands on every rupee. Yet the years in which saving is hardest are also the years in which it is most powerful, because money invested early has the longest time to grow. A small monthly contribution made from the age of twenty-five can end up larger than a much bigger one started at forty-five. For most of India's workforce, which is employed informally, there is no employer who deducts a pension contribution automatically. Voluntary pension schemes exist, and some offer a government co-contribution, but enrolment has been uneven and many accounts stop receiving payments after a few months. The reasons are familiar: irregular incomes, distrust of long lock-in periods and a lack of reminders. Designers of newer schemes have tried to respond. Contributions can be made in small amounts, linked to a bank account and adjusted when income falls. Some schemes allow a portion to be withdrawn in emergencies, which makes people more willing to commit in the first place. These features reduce the cost of joining, though they may also reduce the final pension. The deeper challenge is demographic. As life expectancy rises and families become smaller, fewer people will be able to rely on their children in old age. A pension system that covers only the formally employed will leave the majority exposed. Building savings habits among informal workers is therefore not a matter of personal finance alone but of social stability.

   Q1.Why does the author say that the years when saving is hardest are also when it is most powerful?

   • A.Older workers are not allowed to save.
   • B.Interest rates are higher for young savers.
   • C.Money invested early has the longest time to grow.
   • D.Young workers earn the highest wages.
   • E.Pensions are paid only to young workers.

2. Q2.Which of the following is NOT given as a reason why many pension accounts stop receiving payments?

   • A.Not being reminded to pay
   • B.Distrust of long lock-in periods
   • C.Irregular incomes
   • D.High tax on pension income
   • E.Lack of reminders

3. Q3.How have newer schemes tried to make joining easier?

   • A.By making pensions compulsory for all workers
   • B.By allowing small, adjustable contributions and partial emergency withdrawals
   • C.By paying a fixed bonus to every member
   • D.By removing all government contributions
   • E.By closing accounts that miss a payment

Start the test to answer these. Correct answers and explanations are shown after you submit.