LV will exit the annuity market following a short consultation with employees, according to Hargreaves Lansdown.
The advice firm in a statement on Wednesday (16 November) announced: "LV have notified Hargreaves Lansdown that they are quitting the annuity market with immediate effect.
"We understand all outstanding quotes and applications will be honoured."
The move will mean LV no longer offers enhanced annuities, the only product in the sector it sold.
The decision comes a week after LV flagged it was consulting on the withdrawal from the market.
At the time, LV said two factors were behind the proposal: pension freedoms, which took away the requirement for retirees to use their pension savings to buy an annuity, causing demand to plummet; and record-low interest rates and bond yields, which were heavily depressing annuity rates.
However, a spokesperson for LV stressed that, while the firm believed the proposal to pull out of enhanced annuities "made sense", the final decision depended upon the outcome of a consultation currently underway with LV employees.
Tom McPhail, head of retirement policy at Hargreaves Lansdown, said: “The writing was on the wall after LV= announced their review a few days ago.
"Given the dwindling number of participants left in the annuity market, it is more critical than ever that investors shop around for the best possible terms before committing to a retirement income decision.”
He pointed out that annuity rates had recovered in recent weeks from their historic lows and were now around 7 per cent higher than they were in September.
“The majority of retiring investors want at least some guaranteed income. Unfortunately the combination of the pension freedoms, monetary policy and the capital reserving requirements imposed on insurance companies have driven up the cost of buying a secure income for life through an annuity."
He called on policymakers to work with regulators and the industry to look at ways to address this problem.
FTAdviser requested confirmation from LV, but had received no response at time of publication.