Pension savings with a value of £100 or less will be exempt from paying flat fees from April.

The DWP said the introduction of the threshold will complement the introduction of Pension Dashboards which it says will allow savers to keep track of their small pension pots more easily.

Pensions Minister Guy Opperman said: “We all know what a success Automatic Enrolment has been in getting more people saving into private pensions – with over 10 million employees paying into a workplace pension since 2012.

“But for some, particularly those who regularly take on short-term work and change jobs frequently, there is a greater chance that they will be automatically enrolled into new workplace pensions a number of times, building up a collection of deferred small pots.

“Removing flat fees on pension savings worth less than £100 will provide a boost to hundreds of thousands of people and help them enjoy the retirement they deserve.”

In the announcement, the DWP also added that it is considering evidence gathered on the standardisation of permitted charges and will publish its findings and next steps soon.

The new threshold will come into force from April.