Up to eight million customers who have savings in endowments, pensions and with-profits bonds are being deterred from withdrawing their money by insurance companies that are enforcing exit fees on their accounts.

In response to continuing turbulence in the markets and as an attempt to stem the flow of withdrawals being made from bonds, pensions and other investments, Norwich Union, Friends Provident and Scottish Widows have all introduced exit fees on the majority of their with-profits policies, joining others that already have the so-called market value reductions (MVRs), including Standard Life, Legal & General, Equitable Life, and Scottish Mutual.

To try and prevent their customers from taking their money out, causing a run on the funds, the insurance companies could charge those savers wanting to get their hands on their cash an average £4,000 each.

As a recession looms and the cost of living rises, the move will have a negative impact on those who will opt not take their money out before their allotted date in order to avoid paying the penalty.

Norwich Union customers could be affected again next year if experts’ predictions are correct and the insurer scales down its planned £1billion payout to with-profits policyholders.

“The stock market is no longer a matter just for newspaper headlines and City investors” said Vince Cable, the Liberal Democrat Treasury spokesman. “It is starting to hit home with millions of small, individual investors, many of whom are prudent savers.”

Many people were led by their financial advisors to believe that investment in with-profits schemes including pensions