The graph below shows the impact, over different time frames, of a range of charges applied to savings of a typical employee contributing over several decades.
The difference in the total pot saved, over the course of a 40-year working life, between a scheme charging 0.5pc and one charging 1.5pc, works out at approximately £50,000.
The level of the cap has proved controversial with many saying it is not low enough. Some providers have already demonstrated that they can offer arrangements with lower fees.
When challenged on this point at a pensions function earlier this week, Mr Webb said the precise level of the cap was about "striking a balance" between savers' interests and the need for providers to "want to play". He said: "We need there to be enough providers wanting to compete."
He also said he was aware that some providers would comply with the cap by reducing their overall annual fee, but would then levy other, additional costs onto either savers or their employers – effectively reducing the intended benefit of the cap.
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