We face a pensions crisis because more than half of working people wil

We face a pensions crisis because more than half of working people will rely solely on the state to provide a pension in their old age. These people have paid into a state pension scheme all their working lives. In return they expected to be provided with a state pension to live on during their old age. Why then the crisis? In the 1960s there was one pensioner for every five workers. This ratio dropped to one pensioner for every three workers and is forecast to go as low as one pensioner to every two workers within the next 20 years. The government will simply not be able to afford to provide pensions to the millions of dependent pensioners. To make ends meet it is estimated that the government will have to cut pensions by 30 percent of the current already low pension rate. This means that if you rely solely on the state for your pension you may well find yourself retiring to utter poverty. No wonder people are talking about a crisis, and it will directly affect around 12 million people. A large slice of the other half of working people is also at risk of retiring to poverty. These workers have, as well as their state pension, a private scheme to which they contribute and intend to use it to top up their state pension in retirement. However, most are contributing only a pittance towards these schemes and have funds currently valued at less than $10,000. On their retirement the majority of this group of people will find that their private schemes are insufficient to buy them a meaningful second source of income.

Q1. Which of the following would most likely follow on as the next sentence in the passage?

A. The government faces an $800 billion bill for public sector pensions.
B. They too will not be able to enjoy a decent quality of life in their retirement.
C. Long-awaited proposals to tackle the looming crisis were rejected out of hand by the government yesterday.
D. They too eagerly await proposals as to how the crisis might be avoided.
E. Long-awaited proposals as to how workers can be encouraged to save more for their retirement were announced recently.


Q2. In making his case the author relies on which of the following assumptions?

A. that the government has not been putting aside workers’ contributions in order to meet its future pension commitments
B. that a net influx of migrants could help improve the future pensioner–worker ratio
C. that the government has been putting aside workers’ contributions so that it can afford future pension commitments
D. that a net outflow of migrants could serve to improve the future pensioner–worker ratio
E. that the government is unlikely to accept future recommendations to increase the rate of the basic state pension


Q3. Which of the following is answered in the passage?

A. the extent to which the number of pensioners will increase and the number of workers will fall over the next 20 years
B. the extent to which the ratio between pensioners and workers is likely to fall ultimately
C. how relatively uncomfortable retirement will become given the fall in the ratio between pensioners and workers
D. how many millions of people are at risk of retiring in poverty
E. to what extent future increases in life expectancy will exacerbate the problem