The announcement from Stephen Timms, the Pensions Minister, came as some would-be providers expressed fears that stakeholder charging structures were being pitched too low to be profitable.
However, other companies, including Legal & General, said they would not find it hard to live with the proposed charging structures.
A spokesman at L&G said: "This is something we have proposed ourselves. We do not foresee any difficulty with it."
Mr Timms said yesterday that the new pensions were designed to act as a low-cost savings option for people earning under pounds 18,500 a year.
"The 1 per cent charge limit is a tight figure which reflects our determination to drive a hard bargain on behalf of potential scheme members.
"It nonetheless makes a reasonable allowance for basic advice and information - indeed, there are already products on the market which charge at or below this rate," he said.
The Government's stakeholder proposals were first announced late last year, although no figures on charges were given. Ministers made it clear that a major concern was to avoid repeating the expensive and hard-to- understand charging structures used by most personal pension providers, which can cost most of savers' first two years' premiums.
By contrast, the stakeholder proposals involve a maximum annual charge of 1 per cent of the value of the fund to cover all operating costs.
Other proposals include minimum contributions no higher than pounds 10, either for regular or one-off contributions, with no minimum frequency of contributions. There will be no additional charges for transfers into or out of stakeholder schemes.
A spokesman for the Association of British Insurers said: "We fully support the concept of stakeholder pensions, although the charging structures set out by the minister are challenging."
Tom McPhail, pensions development director at Torquil Clark, a Wolverhampton- based independent financial adviser, said: "It will be interesting to see who can meet that pounds 10 minimum contribution target on charges. My own guess is that not that many companies will be able to."Reuse content