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Investors could be allowed to breach the existing limits on pensions saving if they put money into “patient capital”, according to a review commissioned by the government.

The proposal was put forward by an industry panel, led by Sir Damon Buffini, which looked at ways to encourage investment in new businesses, such as tech start-ups, for the long term.

The initiative, name checked by the chancellor in Wednesday’s Budget speech, would involve a relaxation of annual and lifetime limits on pensions savings to encourage investment in a “patient capital investment vehicle”, a government-backed development fund. The fund, intended to act as a catalyst for £2bn of private investment, would allocate money to growing businesses and venture capital funds.

The experts suggested that adjusting the amount that could be invested in pensions “would tap into a significant demand” given the low interest rate environment. The lifetime pensions allowance currently stands at £1m, reduced from £1.8m in 2011, though it will increase to £1.03m from next April

They also mooted a relaxation of the “tapered” annual allowance which currently prevents high earners from putting more than £10,000 per year into a pension rather than the normal £40,000.

Sir Steve Webb, director of policy at Royal London, the insurer, said: “Many higher earners are now starting to bump up against annual and lifetime limits which mean they can no longer save as much money in a pension as they would wish. The idea of relaxing those limits for those who want to invest in start-up businesses is a creative one and could be very attractive to those who are currently restricted.

“This is a type of investment that would be best suited to sophisticated investors on the basis of expert advice, but could be a very attractive option for some and could help to draw worthwhile funding into the sector. It is certainly an idea that is worth exploring.”

David Mott, managing partner at Oxford Capital, an investment company, and chair of the BVCA venture capital committee, said the proposals complemented existing tax-advantaged funds. He said they might allow people to allocate some of their funds into investing in companies at a later stage of development than those supported through the Enterprise Investment Scheme. “It would be acting as replacement capital for those taking early-stage risks.”

John Ralfe, an independent pensions expert, said he was sceptical about the proposal, which amounted to a further tax break for the wealthy. “There are already lots of different incentives to encourage people to invest in things considered to be a good thing,” he said. “By definition they benefit the well off. All you are doing is giving a further tax break to those who already have.”

He also raised concerns that the move would add extra complications to the pensions system. “The idea of tinkering at the edges — even if a good thing of itself — is a bad thing because it adds to complexity.”

Several other barriers to greater use of pension funds to invest in patient capital were highlighted in the responses to the government consultation on “financing growth in innovative firms”. Lack of third party research was cited as a limiting factor for individual pension savers.

Many respondents said that the requirement of investing platforms that investments be valued and tradeable on a daily basis acted as a barrier to investing in patient capital by defined contribution pension schemes. One respondent expressed the view that government intervention to encourage risk taking could lead to losses for schemes.

The government said it would continue to analyse the responses and investigate the barriers facing investors seeking to invest in patient capital over the coming months.

In response to the recommendations, the Treasury said it planned to establish a working group of institutional investors and fund managers. They would examine how to increase the supply of patient capital, including by “tackling continuing barriers holding back defined contribution pension savers from investing in illiquid assets”.

The move was part of a package of measures which the Treasury said aimed to unlock over £20bn of investment to finance growth in innovative firms over 10 years.

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