Woodford investors face high costs and losses

"However, investors will still be incurring high costs for the winding up of the fund, particularly selling off the illiquid assets. These costs will be taken out of any proceeds from the sale, so will eat into the money investors get back.".

He added: “The fund will begin to wind up in January next year, and investors will get their first return of cash then, when the more liquid assets have been sold.

"But it will be a while before investors get back all the money due to them. The liquidity assessment carried out by the fund and divulged to the FCA in April this year showed that a third of the fund was in assets that would take six months to a year, or more, to liquidate.

"The portfolio has shifted a bit since then, but it’s unlikely to be a quick process.”

Martin Bamford, managing director at Informed Choice, estimates investors are looking at a loss of between 30 and 70 per cent of their cash.

He said: “There’s no science behind the calculation, it’s just based on my experience and assumptions about the illiquidity of the holdings combined with the timescale required to sell assets and the current market outlook.

"I want investors who are trapped in the fund to be aware of the possibility and understand the impact this could have on their overall financial planning."