Prudential will stop offering annuities to existing pension customers entirely, eight months after it pulled out of the open annuity market, FTAdviser can reveal.
A spokesperson for the life office said, while the exact timescale had not been determined, by the end of 2017 Prudential would no longer be writing new annuity policies.
Prudential’s existing pension customers wanting to purchase an annuity would instead be offered an annuity panel of external annuity providers, comprised of Aviva, Just, Legal & General and Retirement Advantage annuities.
The spokesperson said the panel was already up and running.
The decision to exit the annuity market entirely will allow Prudential to focus its retirement business on retirement drawdown products.
The news comes less than two years after the introduction of pension freedoms caused annuity sales to plummet, as retirees increasingly opted for flexible products and to cash in their entire retirement pots.
As a result, a number of major providers have scaled back their annuity businesses.
Standard Life announced in November it was pulling out of the open market, while LV went a step further, withdrawing from both the open and closed markets.
Aegon’s announced departure from the market in early 2016 was the most dramatic: the life company sold its entire annuity book to Legal & General and Rothesay Life.
Source: FTAdviser