The government has missed an opportunity to boost automatic enrolment into pensions at work, industry experts have said, after pensions minister Steve Webb said restrictions on Nest, the default scheme set up by government, would remain until 2017.

Mr Webb said the contribution limit into Nest of £4500 a year, along with the ban on inward transfers from other schemes, would not be scrapped for another four years.

It means companies will eventually be freed up to choose Nest as the single scheme for all employees, in a move fiercely opposed by leading pension companies including Edinburgh-based Aegon and Scottish Life.

Joanne Segars, chief executive of the National Association of Pension Funds, said Nest had an important role to play in making auto-enrolment a success.

She said: "There might have been a case for lifting these barriers earlier, but doing so from 2017 provides the clarity and certainty that employers, savers and the pensions market all need."

She added: "Employers will be able to treat Nest like any other pension on the market, and savers will be able to pool their small pension pots into a simpler and bigger fund."

But former government adviser Dr Ros Altmann said the government "seems to have bowed to industry pressure" by delaying the changes.

She said: "The private pensions industry has already managed to prevent Nest from winning some of the most profitable pensions business."

By 2017 most attractive employer business will have chosen other schemes. The longer the restrictions remain, the less business NEST will attract, because once employers have already chosen a scheme for their auto-enrolment duties, they will be less likely to want to move to NEST later."

Tom McPhail, at brokers Hargreaves Lansdown, said: "It never made much sense to have a set of rules which were peculiar to one particular pension scheme."