Prudential will no longer offer its annuities on the open market but will continue offering contracts to existing customers.

The life insurance company said that the decision was taken after assessing the impact of the rapid decline in the size of the annuity market.

Confirming the decision, a Prudential spokesman said: "We can confirm that we propose to make a change to conventional annuity business written with financial advisers.

"Our existing annuity customers who currently receive regular retirement income payments will not be affected by this decision."

The company has decided not to accept any new applications from advisers for new annuity customers after 17 June 2016.

Earlier, Prudential has argued that the new stricter Solvency II rules for pension providers make it harder to operate the business profitably.

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By GlobalData

After withdrawal of Prudential, there will be only a few providers in the open market, including Aegon, Aviva, LV=, Scottish Widows and Retirement Advantage, among others.

The experts have warned that the declining numbers of annuity providers in the open market will leave customers exposed to a less competitive market.