In his review of pensions, conducted in conjunction with the House of Commons Library, Blake warned that someone with a pot of £30,000 could face losing up to 27% of it through charges related to administration and investment management fees.
The research suggests the average annual administration costs would be around £400, with an extra £30 for every early withdrawal made.
Blake commented that due to additional costs the "flexible drawdown" pensions available from April 2015 may end up costing at least as much in charges as buying an annuity.
"Sensible people who are trying to make their pensions last are the most at risk from high charges, as over a 20-year horizon, large sums could be removed from their funds," he said.
TUC general-secretary Frances O'Grady called on the government to gather more "robust evidence" to ensure pension schemes offer higher value to savers.
"The annuities market was broken, but the government’s plans risk undermining pensions saving altogether, rather than providing savers with the products they actually want," she said.
“There is an urgent need to ensure that low and middle earners who are starting pension savings thanks to auto-enrolment can turn them into reliable income in retirement. The review is an opportunity to take the considered approach needed to solve this problem.”