Pensions minister Steve Webb plans to cap charges on auto-enrolment pension schemes at 0.75%.
Speaking during the House of Commons debate on the Pensions Bill Webb said a consultation on how to deal with the "scourge of excessive charges" would be launched tomorrow.
He added the 0.75% cap would be one of a range of options outlined by the Department for Work and Pensions."We will look at how far we can get with disclosure and transparency," he said. "But also some options on an absolute charge cap.
"I can tell the house we will include the option of a 0.75% charge cap on workplace pension schemes. This will, I believe, be a tougher charge cap than the opposition have called for."
Eleswhere, Webb said Labour's amendment which would have seen annuity brokerage used as standard in auto-enrolment schemes was "too prescriptive"
He said: "The amendment here is too narrow, too prescriptive. But there is a big agenda on decumulation, it is not just about annuities."
Webb added work surrounding decumulation was ongoing and admitted problems had not all been solved.
Labour's shadow pensions minister Gregg McClymont said auto-enrolment absolutely had to work effectively for the ten million people who would be auto-enroled.
He added the interaction with state pension reforms - which will see the state-second pension cease to exist - needed careful consideration.
"The minister has gone for a hard fast wind up of the second-state pension. If you are going to engage in a very quick wind up, a very fast move to a flat-rate state pension but biggest losers are likely to be people in the private sector, the lower paid.
"These very same people who will be auto-enroled are the same people who are losing out in the longer term in the state pension reforms.
"The first thing the pensions minster should have done when he took office is to work out how ten million people who are auto-enroled will get value for money."
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