The Work and Pensions Committee called for these fees to be banned as they can wipe off large amounts from a worker’s retirement pot.

As it stands, employers can pass the cost of financial advice given to them on to their employees in the form of ‘opaque’ charges that are too complex to understand.

The report said: “Some scheme members are likely to end up paying consultancy charges for advice which provides little or no benefit to them. We are very concerned by the high level of such charges quoted in some advisers’ literature and the potential for this to reduce significantly the size of scheme members’ pots.

“The government and the regulators have made it clear there needs to be a clear benefit to employees arising from the use of consultancy services; however, no-one has explained how this benefit should be demonstrated.

“It seems to us that the lack of transparency in consultancy charge structures may make such a demonstration exceedingly difficult.”

A recent investigation done by Which? in last month revealed that these ‘consultancy charges’ could wipe out 50% of savings in some extreme cases.

The consumer group highlighted that some employees faced an initial charge of £600 over 12 months followed by an ongoing £60-a-year charge.

Which? said that if this happened every time someone switched jobs and enrolled into a new pension, they would see large amounts of money disappear, especially low earners who tend to have several jobs in their working lifetime.

Richard Lloyd, Which? executive director said: “It is critical there are minimum standards for workplace pensions so that people are automatically enrolled into high quality and good value schemes.

“We have also been calling for immediate action from the Government and regulators to stop high consultancy charges which can leave some employees significantly out of pocket for the first few years.”