My husband and I qualify for a keyworker home scheme, but its funds for this year have been allocated. Are there any others we can try?

Around 2 million customers with endowments and pensions with Standard Life could have their payouts cut after the insurer announced today it was reducing final bonuses and increasing early exit penalties.

The company blamed “significant falls” in equity markets for its decision to increase the exit penalty on one of its pension funds to 30% and introduce a penalty for investors who want to quit its mortgage endowment fund.

Standard Life said the FTSE had fallen 37% since the last round of bonuses were announced in August, and the changes were necessary to ensure customers who remained in the fund did not lose out.

Customers with a regular premium pension will see their final bonuses cut by between 8% and 14%, while mortgage endowment customers could see the value of their payouts fall by 11% to 13%.

Final bonuses have already been cut by up to 9% this year for some policyholders.

The firm said its mortgage endowment customers would face a “market value reduction” (MVR) penalty of up to 7%, although the average charge would be 1.6%. Early withdrawals could previously be made without attracting a fee.

Pensions customers will also see MVRs introduced or increased. On one fund, which offers guaranteed growth of 4% a year, the maximum MVR for early withdrawal will be increased from 25% to 30%.

The insurer said a with-profits bond based on an investment of £10,000 made on October 29 2003 would have a cash-in value of £12,060 today, compared with £13,947 a year ago.

The move follows similar announcements by other insurers including Norwich Union, which last week reintroduced a MVR to some of its with-profits investments.

Standard Life’s spokeswoman, Margaret Flaherty, said the changes were being made to ensure all policyholders were treated fairly.

“Despite today’s changes, with-profits plans are still providing some protection against market volatility for customers approaching maturity and retirement,” she said.

“Standard Life remains committed to with-profits and continues to believe that with-profits can be an appropriate investment as part of a balanced portfolio.”

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Mortgage lending edged up in September, figures published by the Bank of England showed today.

The value of net mortgage lending, which takes into account repayments and redemptions, increased by £2.2bn compared with a fall of £0.7bn in August. Lenders approved 33,000 loans in September, up from 32,000 in August.

However, the figures are still considerably below the previous six-month average, reflecting the continued shortage of funding for buyers. Mortgage lending increased by £3.5bn a month on average over the previous six months, and an average 43,000 loans were approved for home purchases each month.

The number of mortgages approved in the third quarter of the year is a fraction of those granted in the same period last year, as the credit crunch keeps a tight grip on the housing market. Just 98,000 home loans were approved for purchase between July and September compared with 101,000 in September last year alone.

There were 72,000 remortgage loans approved in September, up from 64,000 in August but still very low compared with an average of 82,000 over the previous six months.

Howard Archer, chief UK economist at Global Insight, said the data remained “very weak.”

“Despite the very limited improvement from August, the Bank of England mortgage data for September still showed that housing market activity continued to be decimated by the highly damaging combination of stretched buyer affordability and tight lending practices,” he said.

“Together with the deepening economic downturn, this reinforces pressure on the Bank of England to cut interest rates by at least a further 50 basis points from 4.5% to 4.00% at its November policy meeting next month.”

Separate figures from the Building Societies Association (BSA) also showed an increase in mortgage lending. Net lending increased to £314m in September, compared with -£37m in August, but were considerably lower than the £592m lent in September 2007, the BSA said.

Director general, Adrian Coles, said: “With the housing market depressed as house prices continue falling and with confidence amongst potential home buyers low, it is no surprise that mortgage lending is down on last year, and the mortgage market is unlikely to recover for some time.

“Nevertheless, the increase in net lending in September is to be welcomed.”

Meanwhile, the Bank of England also said consumer lending through personal loans and credit cards increased by just £0.3bn compared with an increase of £1.1bn in each of the previous six months.

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