Laith Khalaf of stock brokers AJ Bell said customers were being “ripped off”. “If you’re paying an annual charge of over 1pc for a basic tracker fund, then you’re being ripped off, because similar funds are available for a fraction of that price.

“Over time, annual charges mount up and will leave you significantly out of pocket if you’re paying more than you should,” he said.

Rival savings firms L&G and OneFamily were also among the worst offending firms charging high fees, up to as much as 0.85pc and 1.5pc for certain passive tracker funds respectively. 

Halifax said its most expensive tracker funds were sold between 2002 and 2012 and included additional fees for investment advice. It said the funds were no longer available to new customers, following a clamp down from the City regulator, the Financial Conduct Authority.

It added it proactively switched customers in the high-fee funds to cheaper alternatives with the same investment strategy, but only after 20 years. Customers still have more than £1bn in the “rip-off” funds, according to figures from data firm Morningstar. 

L&G’s most expensive tracker also included charges for advice. The fund is no longer actively sold, although it is still available and still contains more than £750,000 of investor money. 

Mr Khalaf said as a general rule fund charges for passive funds of around 0.5pc were acceptable, but only if they included platform charges. Anything above this meant investors were “seriously paying over the odds”. 

A spokesman for Halifax said the firm believed its fees represented “value for money”.

L&G said it “regularly monitored” its charges to ensure it was offering value to customers, while a spokesman for OneFamily said its fees were” entirely transparent and there are no hidden charges for administration, the funds or separate platform fees”.