The Government says a 0.3 per cent annual charge is still a realistic long-term aim for personal accounts but accepts that charges will be higher initially.
Savers will be given a limited choice of funds, possibly including some branded products, and a default fund which most people will be auto-enrolled into with the chance to opt out.
Employees enrolled into personal accounts will be prevented from transferring existing pension assets into the scheme for at least eight years.
Good quality company pension schemes will be awarded a quality mark to encourage them not to abandon their schemes when personal accounts come into force in 2012.
The maximum annual amount people can pay into personal accounts has been increased from £3,000 to £5,000, a move which some commentators believe could lead to more employers closing their occupational schemes.
A delivery authority will be assigned statutory powers to oversee the design of personal accounts and minimise the impact on existing occupational schemes.
The Government intends to offset the costs for employers by phasing in the compulsory 3 per cent contributions over three years.
As expected, employees will have to pay in a 4 per cent contribution matched by 3 per cent from the employer and 1 per cent tax relief.