Tens of thousands of savers were last night denied access to their nest eggs after one of Britain's best known fund managers banned withdrawals.
In a dark day for investors, Neil Woodford said customers of his flagship fund would not be allowed to take out their cash for at least 28 days.
It means that anyone planning to use the money – for anything from a deposit for a house or building work to paying for holidays or a wedding – will be forced to either wait or find the cash elsewhere.
Experts say investors will be shocked and concerned by the news.
Neil Woodford has said customers of his flagship fund Woodford Equity Income would not be allowed to take out their cash for at least 28 days, which came after investors pulled hundreds of millions of pounds in a matter of weeks
The extraordinary move, which came after investors pulled hundreds of millions of pounds in a matter of weeks, leaves Mr Woodford's already tarnished reputation hanging in the balance.
His 30-year investment track record, 25 of which were spent at Invesco, encouraged thousands of savers to back him when he branched out on his own and set up the Woodford Equity Income Fund in 2014.
But the disastrous combination of a long run of underperformance and the plummeting share price of some of Mr Woodford's individual stock selections, prompted a rush for the door.
The fund reached its peak in June 2017, valued at just over £10billion. High profile investors such as Jupiter withdrew millions in the second half of 2017, and since then the fund has been in decline.
The fund reached its peak in June 2017, valued at just over £10billion. High profile investors such as Jupiter withdrew millions in the second half of 2017, and since then the fund has been in decline
In recent months the withdrawal rate has accelerated.
The Equity Income Fund dropped from £4.33billion in April to £3.77billion at the end of May, according to research by data firm Morningstar. Kent County Council then tried to pull out £250million of pension fund money, according to reports, but it too has been trapped by the suspension.
Mr Woodford has taken the extraordinary decision to stop savers withdrawing their money for a minimum of 28 days.
Savers were told all share dealings, including buying and selling would be suspended in the 'best interests of investors'.
As more and more investors demanded their money back, alarm bells were ringing that the fund was running out of cash reserves to meet the requests.
The Equity Income Fund dropped from £4.33billion in April to £3.77billion at the end of May. Kent County Council then tried to pull out
