Plans to stop "rip-off" pension charges could see people getting an extra £100,000 in their retirement savings pot.
The Government is to unveil plans that could include a ban on all charges above 0.75% a year as it rolls out landmark reforms to automatically place people into workplace pensions.
The industry has been working to improve transparency and the average charge on new pension schemes set up in 2012 is around 0.51%.
But the Office of Fair Trading (OFT) estimates there are more than 186,000 pension pots with £2.65bn worth of assets which are subject to an annual charge of above 1%.
Small variations in charges can make huge differences over time to the eventual size of the pension pot that someone ends up with.
The Government said that someone who saves £100 a month over a typical working lifetime of 46 years could lose almost £170,000 from their pension pot with a 1% charge and over £230,000 with a 1.5% charge.
A pension saver with a 0.75% annual charge on their pension pot could eventually end up £100,000 better off than if they had been charged a rate of 1.5%, the Government said.
Pensions Minister Steve Webb said: "The Government believes that enough is enough on charges.
"People need to know they are getting value for money when they save into a pension and not being ripped off by excessive charges."
Other options for caps being considered by the Government include a higher charge cap of 1% and a "two-tier" cap.
The two-tier cap would involve a standard cap of 0.75% and as well as a higher cap of 1% if employers explain to the Pensions Regulator why their scheme charges more than 0.75%.
Any final cap could lie somewhere between the two levels suggested, depending on the evidence received.
The Government wants to hear from the industry and the public on how it can best design a charging cap that can protect people's savings before putting its plans in place next year.
Otto Thoresen, director general of the Association of British Insurers (ABI), said: "The industry is committed to making pension reform a success and of course will engage fully with this consultation."
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