Helen Catt
Political correspondent
Ian Duffield
Ian Duffield and his spouse Linda put £234,000 in their pension financial savings into Neil Woodford’s fund
Individuals who misplaced tens of hundreds of kilos when a celebrity stockpicker’s funding fund collapsed say they have got been let down through the United Kingdom’s monetary regulator and are calling on MPs to research.
Round 300,000 folks misplaced cash when Woodford Fairness Source of revenue Fund collapsed in 2019.
In 2023, the Monetary Behavior Authority (FCA) introduced a “redress scheme” that it stated would permit buyers to get better round 77p within the pound.
However some buyers say that determine used to be deceptive, and the scheme getting into power locked them out of different shopper protections.
The FCA says the scheme provides the “fastest and highest probability” of having a “higher consequence than could be completed through different manner”.
When Ian Duffield and his spouse Linda, from Manchester, put £234,000 in their pension financial savings into Neil Woodford’s fund, they concept maximum in their cash could be secure.
Mr Woodford got here with a stellar recognition, and the fund marketed that it used to be secure underneath the Monetary Products and services Reimbursement Scheme (FSCS), which will pay repayment when a monetary company fails.
After its cave in, the Duffields recovered a few of their cash when the fund’s belongings had been bought off, however this nonetheless left them with a lack of about £107,000.
Ian stated when the redress scheme used to be introduced, they to start with concept they’d get maximum of that closing sum again.
“Once I first heard it, I assumed… I’m going to finally end up dropping, possibly £30-35K between us, which isn’t nice, however within the scheme of items it might were OK, a bit of of a sigh of aid”.
On studying the element, he realised that used to be no longer the case, because the scheme took into consideration the cash they’d already won.
He in truth were given £7,600, leaving him and his spouse with a complete lack of just about £100,000.
“It has affected our lives. We had not to take vacations for a couple of years…however we are lucky,” he says.
“I do know individuals who’ve misplaced some distance lesser sums, however the have an effect on has been a lot better”.
‘Shafted’
Traders within the fund voted to simply accept the scheme in December 2023, that means they’re now not ready to get right of entry to the Monetary Products and services Reimbursement Scheme.
Paul King from Kingston-upon-Thames works in IT and invested just below £50,000 within the Woodford fund to lend a hand save for his retirement.
He stated he had taken convenience in the truth that it gave the look to be secure.
“On the finish of the day, I am only a shopper. You do your highest to provision for the longer term and you place numerous weight at the back of the FSCS,” he says.
“I did not look forward to that if issues went improper that we’d be shafted, to position it bluntly”.
“I believe I have were given extra coverage if I purchase a misguided pair of trainers costing £50 than if the regulator of this nation fails and I lose £50,000”.
‘Nuances and intricacies’
A gaggle of MPs and friends, the All-Celebration Parliamentary Team (APPG) for Funding Fraud and Fairer Monetary Products and services, has now written to the Commons Treasury committee to invite for them to behavior an inquiry into how the FCA treated the fund’s cave in, together with the way it arrange the redress scheme.
In a report back to be revealed on Tuesday, the APPG will say the FCA failed to correctly keep in touch that its “77p within the pound” determine simplest associated with one of the vital belongings within the fund, somewhat than in its entirety.
“Just a minute minority of buyers had been sufficiently engaged to even start to perceive the nuances and intricacies of what used to be going down,” they are going to argue.
The Woodford Fairness Source of revenue Fund collapsed in 2019 after quite a few buyers withdrew their cash over issues concerning the investments being made.
The redress scheme used to be proposed through Hyperlink Fund Answers (LFS), the previous accepted company director of the fund.
It got here after the FCA investigated and 3 investor teams filed complaints over the way in which LFS had controlled the fund.
A FCA spokesperson stated the dimensions of the redress scheme didn’t replicate funding losses because of the underperformance of the fund.
“As an alternative, it covers the losses that flowed from Hyperlink Fund Answers’ behavior, which we believe fell beneath the specified requirements,” they added.
“The scheme presented buyers the fastest and highest probability to procure a greater consequence than could be completed through every other manner. The scheme used to be licensed through greater than 90% of buyers.”
Nearly 94% of buyers sponsored the repayment scheme in a vote in December 2023, even supposing simplest 54,000 voted. It used to be licensed through a Top Courtroom pass judgement on ultimate yr.
