Commenting on news that the government is drafting regulations to cap the fees on company pensions at 0.75%, Andy Masters, head of savings and wealth management at KPMG, said, “While the cap is good news for customers, the big challenge for long-term savings remains customer engagement. There is every chance this positive change will not register with policyholders as consumer interest remains low.

“Continued focus on consumer education and guidance, investment in mobile and online tools for customers to use, and simplification of customer propositions is what is needed.”

Jeremy Oakley, wealth management director at KPMG, added, “Reducing the cost of a pension scheme may have some unintended consequences that the industry must take note of.

“Capping charges will reduce costs but this has been happening already, with the established trend towards low-cost default funds investing largely in passive funds and ETFs.

“Cutting prices is unlikely to increase demand, but because passive investment is a game of slim margins, only the largest asset managers can participate, so the amount of consumer choice is likely to shrink in time.”