Ball said: “Just over a week ago, people could say that they didn’t want to save more in pensions because the charges were sky-high and they did not want to buy an annuity. Now, the government can claim that it has cleared financial services professionals out of the Lamborghini showrooms to make room for pensioners.”

But, according to Ball, if you work for a large employer it’s unlikely that you would have been paying anything near the 0.75 per cent cap. In fact, Ball said, the charge cap may increase costs in these cases as providers could become required to hold more capital or record information in different- more costly- ways.

Those paying charges near the limit will not be paying for a basic product, Ball said. In some cases the pension provider in question will be charging higher rates to recover high distribution costs, while in others the trustees will have concluded that more diverse investments give a better trade-off between risk and return.

Ball said: “Unfortunately, the cap makes no distinction between the two groups – it only looks at what people are paying and not at what they are getting for their money. Indeed, in allowing commission to be paid to advisers when new savers are automatically enrolled into pensions during the next two years, the Government appears content to allow some people’s charges to be closer to 0.75% than they would otherwise have to be.”

He continued: “No one should be forced to invest in a fund with high charges, but capping the default fund goes further than giving everyone the right to access a cheap fund. Having said that all schemes should be overseen by people who put members’ interests first, it appears that the Government does not trust fiduciaries to decide what is worth paying for when designing the default fund.”