A consultation proposes to ban providers from setting their charge for managing a pension pot above 0.75% a year.
It comes amid fears savers are at risk of being placed in poor value schemes as landmark reforms to encourage workers to start putting money towards their retirement roll out.
The Government proposes specifying a broad definition of charges to prevent providers from hiding their fees outside any cap.
It said it wants to stamp out any bad practice which could "undermine trust in the system".
The Government is also thinking of halting a practice known as "active member discounts", where people who have stopped paying into a pension, perhaps as they have changed jobs, see the charges for running their pot go up.
The Office of Fair Trading (OFT) found pension savers typically see their annual charge hiked by around half a percentage point under this system.
Even adding a fraction of a percentage point to an annual charge can wipe tens of thousands of pounds off the size of the pension someone will end up with.
The Government said 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.
Which? executive director Richard Lloyd said: "We welcome plans to cap charges on workplace pensions, but the Government must take this opportunity to really scrutinise the market to see if the proposed cap could be set any lower."
Neil Carberry, CBI director of employment and skills, said firms want to see clearer charges so they can choose a good deal for their staff. He said a cap for automatic enrolment schemes "may be helpful if it is set at the right level".
Independent pensions expert and former Downing Street adviser Ros Altmann also welcomed the moves. But she urged the Government to also improve transparency over what happens when people approaching retirement want to convert their pot into a fixed retirement income by buying an annuity.
She said: "Buying the wrong annuity can be even more damaging to people's funds than being in a higher-charging scheme."
Pensions Minister Steve Webb said: "The Government believes 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." The consultation will run until November 28 and the finalised plans will be put into place next year.