Pensions minister Steve Webb has confirmed the cap on auto-enrolment (AE) schemes will be delayed until April 2015.
Speaking at the Confederation of British Industry Pensions Conference, Webb said the implementation of the cap, originally scheduled for April 2014, has been pushed back to avoid disrupting AE.
Reforms to improve the quality of defined contribution (DC) schemes have also been delayed until April 2015.
Webb said the government will not lose momentum for pension reform ahead of May 2015's general election. He said the delay will cost members, at most, 8p per week, but that it is worth it to get the reforms right.
Pension provider Aegon backed the delay. The firm had previously warned the government not to act rashly on auto-enrolment scheme charges, saying an outright cap may harm auto-enrolment.
Managing director of workplace pension solutions Angela Seymour Jackson commented on the delay: "It will allow employers and providers to get on with enrolling many thousands of employees into workplace schemes, often for the first time.
"Rushing new scheme conditions through at this critical stage would have disrupted many employers' plans to use good existing schemes. The pensions minister's decision will avoid employees losing out on valuable contributions while employers made alternative arrangements.
"Aegon has already committed to participate in an industry-wide audit of existing schemes managed by an independent board. This will ensure all members - new and old - can have confidence they are receiving value for money from pensions."
Aviva head of policy John Lawson said: "Giving consumers good value when saving for retirement has to be our number one priority. If that means government and the industry need to take more time to consider the best solutions, then we should take it - the consequences of getting this wrong are serious.
"Steve Webb has signalled his support for a pension charge cap, which will give employees confidence that they will get a fair deal at time when many will be saving for the first time through automatic enrolment. Employers are under pressure with the rollout of automatic enrolment - giving them some certainty that any charge caps will apply from 2015 gives them time to prepare.
"In 2012 Aviva committed to only auto-enrol employees into low cost, modern schemes with an average total charge of less than 1% per annum. But this is not only about charges, it's right the government also looks deep into areas such as governance, scheme quality and improved transparency, as the OFT has been doing, to ensure we get a balanced outcome."
In December, the Department for Work and Pensions was chastised bythe Regulatory Policy Committee which said the its regulatory impact assessment was not not fit for purpose.
Speaking on Monday, Webb admitted the impact assessment was not detailed enough and he had pushed the charges consultation through "to get things moving".
To ensure creditworthiness assessments compliant
Avoid broad-brush strokes
Partner Insight: Introducing the Architas education series for clients.
What made financial headlines over the weekend?