Image copyright Anne Sweeney Image caption Anne Sweeney says she feels let down

Anne Sweeney was hoping her investments with Neil Woodford would help pay for her new bungalow.

But she is one of hundreds of thousands of investors now getting letters to tell them what they will receive as Mr Woodford's stricken fund is wound up

Mrs Sweeney, 61, from Preston, invested £20,000 and is not expecting to receive any more than £12,500 back.

"I feel very disappointed and let down, like I've been lied to," she said.

She had to ask for help elsewhere to buy the bungalow, and is unhappy with stockbroking group Hargreaves Lansdown, which had Woodford Equity Income on its list of favoured investments for a lengthy period.

A spokesman for Hargreaves Lansdown said: "We share their deep frustration at what has happened and continue to waive our fees while it [the fund] remains closed."

Other investors are also expecting significant losses. Peter Turlik, from London, put £21,000 in the fund, as a five-year investment plan, but will now only receive half of that back.

That is because investors will get between 46p and 59p a share in the next few days, much less than most paid for a share on investment. The extent of their losses will depend on when they invested in the fund.

This will be the first, and biggest, payout made as the fund is wound up, with smaller reimbursements due later once other assets are sold.

What happened to Woodford?

Fund manager Neil Woodford made his name as a star stock-picker at Invesco Perpetual, before launching his own business.

He was as close to a household name as is possible in the world of investing. People piled into his flagship UK Equity Income Fund. At its peak, it had £10bn of people's money in it.

Image copyright Rex Features Image caption Neil Woodford was sacked from running the fund in October

But several of his picks plummeted in value, such as the door-to-door lender Provident Financial, Kier construction and the outsourcing company Capita. He also invested in obscure unlisted shares which have proved difficult to offload.

He was sacked in October, and the decision was made to close the fund. However, many investors have been left in limbo since June when the fund was first suspended.

Now, for the first time, they are being told exactly how much they will receive in an initial payment thought to represent about 75% of the fund.

What happens next?

There is some hope that investors' losses will be reduced by further payouts, but it is not clear by how much.

"The payment of the first tranche of the liquidated assets will be a relief for thousands of investors who have been trapped in the fund since June last year, but there is still huge uncertainty around the money still stuck in illiquid assets [investments which take longer to sell)," said Ryan Hughes, head of active portfolios at AJ Bell.

Shadow chancellor John McDonnell said some responsibility should be taken by regulators.

"Many small investors who were simply seeking a secure investment for their pension have been hurt by the failure of Woodford," he said.

"This isn't just about the failure of Woodford. More importantly it's about the failure of the regulatory system and in particular the Financial Conduct Authority (FCA)."

He called for an independent inquiry and said former FCA boss, Andrew Bailey, should see his appointment as governor of the Bank of England delayed until this is completed.