Three to six million people are expected to join NEST
Members of the forthcoming new state pension scheme - the National Employment Savings Trust - will be charged 0.3% of their funds each year.
Between three and six million people are expected to be enrolled in the scheme, which will be phased in between 2012 and 2016.
Nest will be a top-up to the main state pension for low-to-middle earners not in a good company pension scheme.
A temporary 2% levy on contributions will cover Nest's start-up costs.
"This is comparable to low charges currently being paid by members of large occupational schemes, and means low-to-moderate earners will have the opportunity to enjoy a level of charges that generally only higher earners and those working for larger firms can enjoy," said the Department for Work and Pensions (DWP).
The consumers' association Which? welcomed the decision.
"We are pleased that the government has shown a continued commitment to Nest, ensuring that it remains a low-cost, low-contribution but first-rate pension scheme, which puts consumers first," said Which? chief executive Peter Vicary-Smith.
"It is vitally important that charges are kept low if this scheme is to be trusted by all."
The government expects that another three million or so employees will be automatically enrolled into their existing company pension schemes as an alternative to joining Nest.
The National Association of Pension Funds (NAPF) said it was worried about the 2% contribution fee for the first joiners.
"We are concerned that a 2% charge on contributions mean charges will be relatively high in the first few years - higher than would be normal in an existing large occupational scheme. "
The pension consultants Towers Watson said: "People saving into the scheme early on will meet the set-up costs and people enrolled in future will only have to pay for ongoing running costs."
"The result will be that people near retirement who only save in NEST for a short time could face the sort of charges that the Government said it was creating NEST to avoid," it warned.