Royal London issued a statement in December outlining its belief that it could offer an attractive future for the members of LV= “as part of a growing and well-capitalised mutual”.

The two firms announced on Monday that they had started talks about the possibility of LV=members becoming members of Royal London and “have their life savings protected and invested by a mutual”.

But any deal is now off the table with LV= saying that it had “become clear to LV= that our different mutual models mean such a merger would not be in the best interests of LV= members.”

Seamus Creedon, LV= incoming chair, said: “We thank Royal London for its engagement and we look forward to operating alongside it as part of a vibrant mutual sector. The strength of LV=’s business performance over the past 18 months combined with its operational progress has strengthened the board’s belief in, and commitment to, the continuation of our status as an independent mutual.

“We have heard what our members have said about the importance of mutuality and the continuation of the LV= brand. We continue to maintain our strong capital position, are trading well and building a successful future for LV=, its members, employees and wider communities. We will shortly update our members on our business strategy and will continue to engage with them over the coming weeks and months.”

Barry O’Dwyer, group chief executive of Royal London, said: “Mutuals are owned by their customers and are run for their benefit. Our offer to preserve LV=‘s mutuality through a merger with Royal London was based on an understanding that LV= did not have a viable future as an independent company.

“For Royal London’s customers and members, nothing changes. We remain committed to delivering great value products, backed up by market-leading customer service. We look forward to sharing a substantial level of profits with our eligible customers in April, as we normally do.”

The merger talks came after 179-year-old mutual LV=, which has more than one million members, revealed it needed to seek investment to remain competitive and to grow over the long-term. It held a special general meeting in December 2021 where a takeover bid by private equity firm Bain Capital was rejected.

At the same time, LV= revealed it received an unsolicited preliminary merger proposal from Royal London.