The British government announced plans on Thursday to cap management fees charged by pension providers, sparking a mixed response from the industry.UK pensions minister Steve Webb told the House of Commons that workplace pension schemes that automatically enrol their members will be subject to a 0.75% annual charge cap from April 2015.The decision follows a consultation into different potential measures and the 0.75% cap is the most stringent of the three considered by ministers.Other options included a 1% cap or a looser "comply or explain" rule, which would have enabled schemes to charge higher fees if they could justify them.Ministers also plan to ban payments for sales commission being deducted from pensions, outlaw a rise in charges for those who leave a company but leave money in the pension scheme, and ban pension providers from charging pension scheme members for advice given to their employer.But the government has given the industry some leeway by bringing in the cap a year later than originally proposed."We are going to put charges in a vice and we will tighten the pressure year after year," Webb said.The cap will apply to all money-purchase pension schemes used for auto-enrolment, but will not yet apply to "legacy schemes".It comes amid criticism that some management charges were too high. The average charge on a pension set up in 2012 was 0.51%, but the Office of Fair Trading (OFT) estimated more than 186,000 pension pots with £2.65bn worth of assets were subject to annual charges of more than 1%.Legal & General's Pension Strategy Director Adrian Boulding said: "People aren't retiring with large enough pension pots and one of the reasons is high charges."We would have liked the government to have capped auto-enrolment schemes at 50 basis points, but we welcome the direction of travel."Tom McPhail, Head of Pensions Research at Hargreaves Lansdown, said: "It is vital that pension scheme members can have confidence that their workplace pension will give them good value for money. Today's announcement addresses this issue and means that even if they can't afford a Lamborghini at retirement, at least pension investors won't be helping to pay for the fund managers' new sports cars."But insurer Royal London criticised the move, saying a price cap would do little to improve competition in the workplace pensions market.Chief Executive Phil Loney said: "It will fix the charges that members pay at the level of the cap. The promise to review the level of the cap in 2017 means charges could reduce further in future but they will not reduce at the rate that would be seen if the market was truly competitive and open to active switching."Craig Palfrey, founder of IncreaseYourPension.co.uk, said: "Steve Webb's announcement that pensions providers must cap auto-enrolment scheme charges at 0.75% is a double-edged sword prohibiting workers from having the freedom to invest as they see fit in funds that can potentially yield the best results. "Plenty of schemes already offer a lower charge rate than 0.75%, but the performance is often inferior to funds whose charges are greater."PW