ukMPs and pension experts have welcomed government plans to introduce lengthy jail sentences for executives who recklessly mismanage pension funds, in an effort to avoid a repeat of recent scandals like BHS or Carillion.

Amber Rudd, the work and pensions secretary, said the current fines were not enough and that a new criminal offence would be introduced to punish “wilful or reckless behaviour” relating to a pension scheme, threatening unlimited fines and prison terms of up to seven years for the worst offenders.

She will tell parliament on Monday that the new measures “show that the Conservative government is on the side of workers saving for retirement” and that “we will protect their incomes from reckless behaviour”.

More than 10 million people are now enrolled in workplace pension schemes.