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The additional charges, which is believed to be as high as 10 per cent of pension pots, followed checks on at least 18,000 individual or group pensions with reduced or ceased premiums going back as far as six years.

Remarkably, the FSA has given the green light to this retrospective charging and has admitted there is no time limit on such back-dated charging.

In a letter seen by Financial Adviser, Aegon UK states that "as part of quality checks" it noticed it hadn't collected charges from pension plans with reduced or ceased premiums for six years.

Following consultation with the FSA it had, therefore, collected these charges in retrospect at the beginning of May.

However, in a surprising move, the City watchdog is refusing to state whether charging customers after such a timelapse is in breach of TCF and, in a further blow to consumers, it has refused to put a time limit on how far back firms can charge in retrospect.

A spokesman for the FSA said: "It is not possible to give a definitive answer to the question of whether it is TCF for firms to demand fees from their clients at a later date where the firm, due its own error and with no fault on the part of the clients, failed to make the charges at the appropriate time.

"Whether it is TCF to do this will depend on the particular circumstances against the outcome above.

"The issue of retrospection and what is a reasonable time period will also be guided by this outcome, so again there is no definitive answer the question, but it will depend on the particular circumstances and what customers were led to expect."

Philip Ryley, associate head of financial services and markets for Michelmores solicitors, said there had been no breach of limitation law as this only came into force in cases where there was legal action or breach of contract. However, he said in these circumstances, he would advise his clients to examine their policy documentation to see if there were grounds for arguing the clause was unfair.

He said: "The contractual clause exists but there is the matter of a reasonable time frame in which to collect the charges. A client should decide whether they consider this action fair and register the complaint with the provider. If it remains unsettled they could then go to Financial Ombudsman Service but this could also become an issue for the Office of Fair Trading."

Meanwhile, Aegon UK has apologised for the mistake yet stated the provider was entitled to do this and it would be unfair to other customers to make an exception.

Mark Locke, spokesman for Aegon UK, said: "As part of one of these recent systems checking procedures, Aegon UK identified that a charge had not been taken from some policies for a number of years.

"If we did not reclaim these charges it would be unfair to the rest of our customers who have been paying charges on their policies in line with their policy terms and conditions."

Referring to those affected, Mr Locke said they made up less than 1 per cent of the total customer base, representing 17,903 clients. He was, however, unable to say how the life and pensions provider missed this error in the system for six years.

He said: "We spotted this during a routine check of our system's procedure. I am unsure how we missed it for six years, but the mistake has now been rectified."