The Government said it aims to stop "rip-off" pension charges. The move could see savers saving an extra £100,000 for retirement.
The Department for Work and Pensions (DWP) will today publish a consultation document proposing a basic cap of 0.75% on retirement savings made through auto-enrolment.
The DWP said the average charge on new pension schemes set up in 2012 is around 0.51%, suggesting the pensions industry has been working to improve transparency.
However, the Office of Fair Trading (OFT) estimates there are more than 186,000 pension pots with £2.65 billion worth of assets subject to annual charges of more than 1%.
'Enough is enough'
Webb said the Government believes "enough is enough" on pension charges. "People need to know they are getting value for money when they save into a pension and are not being ripped off by excessive charges," he said.
"I'm confident that we will make the system fairer for anyone being automatically enrolled into a workplace pension and will finally address the issue of charges which has been neglected for far too long."
The Government said that someone who saves £100 a month over a typical working lifetime of 46 years could lose almost £170,000 from their pension pot with a 1% charge and over £230,000 with a 1.5% charge.
A pension saver with a 0.75% annual charge on their pension pot could eventually end up £100,000 better off than if they had been charged a rate of 1.5%, the Government said.
The DWP has said it wants to hear from the industry and the public on how it can best design a charging cap that can protect people's savings before putting its plans in place next year.
