OK, so this is a fairly standard procedure then. You were caught without a valid ticket, as your railcard had expired, and you have been referred for prosecution. But if you cooperate, and reply, apologise for the oversight, (hopefully say that you have now bought a new railcard, and send a copy), promise to be more careful in future and ask very nicely if they will consider an out of court settlement in lieu of prosecution you should in due course be offered one.
Be aware though that they will likely review your online account if it was an e-ticket, and look for any other tickets bought since your railcard expired. They will build the costs of those replacement tickets into any settlement offered.
Be aware though that they will likely review your online account if it was an e-ticket, and look for any other tickets bought since your railcard expired. They will build the costs of those replacement tickets into any settlement offered.