Individual annuity sales were 35 per cent lower in the first quarter of the year, the life company said, costing it £36m.

Prudential said this reflected the “overall downturn in the market though 2013 as policyholders have increasingly chosen to defer retirement”.

However the hit is also likely to have been caused by changes in the March Budget which mean that from 2015 all individuals aged 55 and over can access their entire pension fund as cash, removing the effective requirement to buy an annuity.

On Wednesday Legal and General (L&G) reported that it saw its individual annuity sales drop 40 per cent in the first quarter of the year, with sales down from £406m in 2013 to £244m.

This included a circa £15m impact from cancellations during the extended cooling off period offered after the Budget changes were announced.

Last week Standard Life said its annuity business had tumbled 50 per cent in the first quarter of the year, without giving any more figures.

However it added that the negative profit impact of the changes will reflect the relatively small size of its annuity business.

Elsewhere in its first quarter results, Prudential said sales from other retail products, principally individual pensions, protection and health products and offshore bonds had increased by 22 per cent to £39m.

M&G, Prudential’s asset management arm, delivered over £1.4bn of net inflows in the first quarter of 2014.