09-08-2025
‘Neil Woodford cost me £100,000. His £6m fine is an insult'
When Ian and Linda Duffield planned their retirement, they had dreams of a round-the-world cruise and maybe even a fancy car.
Ian had diligently saved into workplace and private pensions throughout his career at a large retail company and, as his salary increased, he put extra money into his and Linda's Isas. This thorough planning, they hoped, would allow them to enjoy the spoils of a lifetime of hard work and saving.
But now, aged 71 and 69, their vision hasn't materialised. They retired, but the cruise never happened and Ian ended up buying himself a second-hand car for £6,000.
'We are looking at a different retirement than we were expecting,' said Ian, from Manchester. 'We've had to think more carefully about what we have, and all our plans were shelved.'
The Duffields are among the hundreds of thousands who lost money after investing in the Woodford Equity Income fund, the flagship fund launched in 2014 by the star stockpicker Neil Woodford. The fund failed spectacularly in 2019 and Woodford's management of it became the focus of a long-running investigation by the Financial Conduct Authority (FCA), the City watchdog.
Of the £234,000 that Ian and Linda invested through their pensions and Isas, they estimate that they will lose about £100,000 — 42 per cent. On Tuesday the FCA slapped the disgraced Woodford, 65, with a £5.89 million fine. His investment firm, Woodford Investment Management, has been hit with a £40 million penalty — although questions have been raised as to whether it has the assets to pay the fine.
The FCA concluded that Woodford had made 'unreasonable and inappropriate investment decisions' and held a 'defective and unreasonably narrow understanding of his responsibilities'. Woodford and Woodford Investment Management have challenged the findings and the decision is heading for the Upper Tribunal.
But burnt investors say the fines are little comfort to those who have seen their retirements derailed and savings slashed. For many it has left permanent emotional and financial scars that have deterred them from ever investing again.
It comes as Rachel Reeves pushes for more savers to move their cash into the stock market and boost the economy. Victims of the Woodford saga say there is a long way to go before trust is rebuilt in the system.
When Woodford started his own investment company in 2014 he had a reputation as one of the best and most trusted fund managers in the country. Woodford Equity Income fund attracted £1.6 billion of investors' cash almost immediately.
Fast-forward to 2019, and a prolonged period of poor performance and a string of large withdrawals had shrunk the fund from a peak of £10.1 billion to £3.6 billion.
• Woodford 'ignored warning signs and blamed others' as fund collapsed
In funds such as Woodford Equity Income fund, having liquidity in the underlying assets is crucial — it has to be able to sell them quickly if investors want their money back.
Woodford's investments had shifted from large, well-known companies that were easily bought and sold towards smaller, often unlisted companies that were harder to shift. As a growing number of people wanted to take their money out, Woodford was forced to sell the fund's more liquid holdings leaving unlisted, smaller stocks that began to dominate the portfolio.
The fund was suspended on June 3, 2019 when Woodford couldn't sell assets fast enough to meet redemptions, trapping about 300,000 investors who were unable to get their money out. In October 2019 it was decided by Link Fund Solutions, the company that oversaw the fund, that it should be wound up.
Investors received nothing until January 2020. The fund's difficult-to-shift holdings took even longer to sell than expected and many investors are still waiting for all of their money to be returned. The value of many of these assets declined during this time, exacerbating investor losses.
The FCA also arranged a redress scheme that aimed to make up any losses that were caused by regulatory failings rather than market conditions. The regulator said the scheme would return 77p in the pound, but investors say they received more like 7p in the pound of their total losses. The disparity is because the scheme only covered losses which the FCA decided were down to Link's conduct falling below required standards.
In the four years leading up to the fund's collapse, Woodford and his co-founder Craig Newman extracted £98 million in dividends from Woodford Investment Management.
Alongside the £5.89 million provisional fine handed to Woodford by the FCA last week, the regulator banned him from holding senior manager roles and managing funds for retail investors.
Woodford has maintained that he did nothing wrong in the collapse of his fund. In a tearful video filmed last year in Dubai he instead laid blame at the FCA, Link Fund Solutions and the media and said his own treatment had been 'so unfair'.
Ian and Linda were able to recoup £134,000 from the fund and the redress scheme, but have little hope that they will ever see the remaining £100,000. As for Woodford's £6 million fine — 'It's not even going to scratch the surface. It's a disgrace,' Ian said.
• Neil Woodford's tearful interview left big questions unanswered
There are also questions over how much, if any, of Woodford Equity Income's £40 million fine will be paid. The latest accounts show that the company had less than £30,000 in assets and almost £260,000 in liabilities for the year to March 2024.
Richard Harris, 77, lost about £79,000 of his £167,000 investment in Woodford's fund. He said: 'Fining Woodford £6 million is small change to him. And fining a bankrupt company £40 million? I have no idea what the FCA thinks it is doing. The company simply can't pay that fine.'
The finger of blame is not solely pointed at Woodford by investors. Many feel they were repeatedly let down by the FCA and the investment platforms they used to put their money in the fund.
Neil and Mary Taylor estimate that they lost about £32,000 of their £76,000 investment in Woodford's fund. They invested through the Hargreaves Lansdown platform, and are part of a group litigation against Hargreaves for continuing to promote the fund up until its suspension in 2019. Hargreaves is disputing the claim and denies liability.
Neil, 67, from Lincoln, said: 'We invested in the funds that were on Hargreaves's Wealth 50 shortlist of best funds. We don't have direct contact with the fund houses so we followed its view.
'When things started going wrong there was news coming out of Hargreaves saying that it still trusted him and that he was a contrarian investor but would get through this hard time.'
Hargreaves Lansdown said the company had empathy with clients who had lost money in the Woodford fund but had no responsibility for losses suffered. It added: 'Clients of our platform are responsible for making their own decisions about the funds in which they invest. Our communications regarding the Woodford Equity Income fund, including its inclusion on our Wealth Lists, accurately reflected our reasonably held views at the time.'
• Read more money advice and tips on investing from our experts
The redress scheme paid by Link stipulated that investors no longer had the right to claim with the Financial Services Compensation Scheme (FSCS), a safety net that refunds up to £85,000 per person if a financial firm goes bust. Some say Link's scheme did not adequately compensate for its failings in managing the fund's liquidity.
The FCA also has questions to answer, investors say. Nigel Barton, a retired operations director from Co Durham, said: 'The FCA was asleep at the wheel. There were four or five years of signs that the FCA should have picked up on before that and said, what is going on here?
'It started an investigation when it was suspended, but when the patient's dead it's hardly the time to start an investigation.'
Barton lost tens of thousands of pounds of his £84,000 investment. He had deliberately kept the figure below the FSCS's £85,000 compensation limit, but this protection has been removed by the redress scheme.
In March a cross-party group of MPs renewed its calls for an inquiry into the FCA's handling of the Woodford scandal, questioning why the regulator took so long to complete its investigation. It said that the FCA's handling of the scandal had 'undermined trust and confidence' in the UK's financial services industry.
That is certainly the case for John Oldfield, a 73-year-old who lost about half of his £11,000 investment in the Woodford Equity Income fund.
'You start to see conspiracies everywhere, which is really depressing. But the FCA didn't act for such a long time initially, and then why did all this take so long?' said Oldfield, a retired IT worker from Swindon.
'It's all just highlighted to me the degree to which regulation in this country isn't working. I will not invest in any stocks or shares again in this climate. I would never dream of doing it again. The experience of the last six years is sufficiently bleak that I would prefer to live with what I've got than to throw it away.'
The FCA said: 'We have sympathy for those who lost money in the fund. Our aim has always been to hold to account those responsible for managing the fund's liquidity, and investors' ability to get their money out. There are no shortcuts to achieving that especially in complex and technical areas such as this, though we recognise the time required to investigate thoroughly causes understandable frustration.
'All investments come with risk. While regulation can't compensate people who lose money when investments fall in value, we secured up to £230 million for those unfairly trapped because of the failure to manage the fund's liquidity. Mr Woodford, Woodford Investment Management and Link are responsible for those failings.'
Woodford and Woodford Equity Income were approached for comment.
