Pension schemes will, for the first time, be compelled to publish the fees they charge members for investing their pension, under DWP proposals. Up to 10 million people could benefit from the move which will see annual benefit statements sent to members with fees and costs disclosed.

Government will also compel schemes to publish an illustration of the compounding effect of the costs and charges affecting their pension savings. The consultation is open for 6 weeks.

The Financial Conduct Authority (FCA) will consult on corresponding rules for workplace personal pensions in the new year.

Under the DWP proposals, savers will be able to access information about where their money is invested, opening up the possibility of people having greater choice over where their pension is invested. Failure to provide this information could cost occupational workplace pension scheme trustees up to £50,000 from April 2018, says the DWP.

This is the next step the government is taking to ensure savers receive good value for money from their pension, that their pension will meet their needs for retirement and that savers are better able to maximise savings.

Secretary of State for Work and Pensions David Gauke said: “The government is beginning to address a fundamental imbalance that exists in the pensions industry.

“For too long savers have been in the dark about where their pension is invested, what they are paying for, and why they are paying it. I want people to have a strong sense of personal ownership over their pension savings. These proposals do just that and will open the industry.

“By giving people the tools to better understand their options and compare value for money, I believe we are creating a generation of smarter, more informed savers.”

Today’s announcement comes on the back of the latest pension charges survey which shows that 98% of eligible members are at or below the 0.75% cap introduced by government.

However, with the survey also showing a clear lack of transparency on some costs in pension schemes, the government is proposing that members receive an annual benefit statement where they can find the costs and charges for their scheme.

Publication of charge and transaction cost information will enable pension scheme trustees and others to compare the value for money they are receiving with their peers, thereby driving better market outcomes, says the DWP.