by Nathalie Knowles BBC Radio 4

Standard Life has issued an apology to policyholders after wrongly applying bonus cuts and exit penalties to up to 300 customers' funds.

On Monday the company announced it would cut the bonuses of more than two million customers by around 10% and begin imposing early exit penalties.

The mistake occurred when the cuts were wrongly applied to the funds of customers who had requested a surrender value on Friday - three days before Standard Life made its announcement.

I was staggered that I had suddenly lost several thousand pounds

Policy holder John Hynes

The BBC was alerted by Money Box listener John Hynes, who asked for 90% of his fund to be transferred to his bank account on Friday.

He was told the transaction would go through on Monday at that day's rates and was assured the rates would not be substantially different.

'Staggered'

When Mr Hynes checked the transfer had gone through he was astonished to find it was much less than he had been told to expect.

"I was staggered that I had suddenly lost several thousand pounds." He told the BBC.

"I estimate that my total loss is about �7000... Standard Life (have acted) absolutely disgracefully.

"It was my suspicion that Standard Life knew they were going to implement a full change of policy over the weekend."

When Money Box raised Mr Hynes' case with Standard Life the company apologised and promised to honour the original valuation he had been given.

The company also undertook to do the same for up to 300 other customers who had been wrongly penalised in the same way.

Change in policy

Standard Life Marketing Director Michael Leahy said "Unfortunately, in this case a mistake was made.

It can sometimes take a while for a change of policy to reach from the centre out to those on the frontline

Standard Life's Michael Leahy

"We would like to apologise to My Hynes and to his wife. We have contacted him and are arranging payment for the full value."

Mr Leahy was adamant a genuine mistake had occurred because of the 'huge change' in policy the company was undergoing.

"It can sometimes take a while for a change of policy to reach from the centre out to those on the frontline."

Correcting the situation

Mr Leahy insisted that each person would be contacted and their position corrected.

"We have gone through our records, searched them out and we are now contacting all the customers and putting them into the correct situation.

"It is a couple of hundred people. A small number in the context of our 4 million plus customers."

Mr Leahy defended the company's decision to make the bonus cuts and introduce exit penalties.

"Over the course of the last 2 years the UK stock market is down by about 40%.

"We need to reflect this in the payouts that we make to our with profits policyholders.

"We have taken this action to ensure fairness between all our policyholders."

Hefty penalties

Standard Life has �2.1m with profits members in the UK.

It is the first time the company has levied an exit penalty although several of its competitors have operated such charges for some time.

The news came just a week after Chief Executive Iain Lumsden assured investors Standard Life was not intending to cut rates or introduce early exit penalties.

Until the end of July, the Edinburgh-based assurer said it had not experienced many early policy surrenders.

In April, the company reported record levels of new business, helped by a sharp lift in sales of pensions.

The assurer has 70% of its with-profit funds invested in shares - higher than most of its rivals that have reduced the amount of shares they hold.

Back in 2000, Standard Life was under threat of demutualisation. At that time it was estimated that the group had reserves of up to �10bn.

These reserves are believed to have fallen to around �2bn. In response, bonus pay-outs have been cut and exit penalties imposed.