Canada Life has reached an agreement to buy financial services provider Retirement Advantage, however, the sum involved has not been disclosed.

Retirement Advantage was created in 2015 following a merger between MGM Advantage and Stonehaven, and it has 30,000 pension and equity release customers with £2bn of assets under management.

A statement read: “Although this is a very exciting time for Retirement Advantage, right now, it is very much business as usual. There are no changes to your product terms or conditions, and we will of course continue to provide you with the same level of support.”

However, the deal is subject to regulatory approval, which is expected to take between three and six months.

Number of annuity providers fall

Following the move, retirement savers will be left with just a choice of six annuity providers, according to Hargreaves Lansdown.

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Nathan Long, senior pension analyst at Hargreaves Lansdown, said another annuity provider bites the dust, as the impact of the new pension freedoms continues to be felt.

“We have not seen Retirement Advantage offer particularly competitive annuity rates for some time, so while we don’t expect annuity rates to be impacted in the short-term, it is still disappointing that another provider has left the market. Long-term this cannot help competition, something we know the regulator, the Financial Conduct Authority, is currently concerned about.

“Retirement Advantage’s innovative retirement income solutions could get a new lease of life with Canada Life’s backing.”

Long added that shopping around for the best annuity rate remains critical for anyone approaching retirement and said: “Annuities still have a huge part to play in retirement and we continue to believe that most people will benefit from some form of secure income like an annuity or final salary pension in retirement to cover any essential spending.”

The current annuity market players:

• Aviva (standard and enhanced)
• Canada Life (standard and enhanced)
• Hodge Lifetime (standard rates only)
• Just Retirement (enhanced rates only)
• Legal & General (standard and enhanced)
• Scottish Widows (standard rates only)

These are the providers which have pulled out of the open market in recent years:

• Aegon
• LV=
• Partnership (merged with Just Retirement)
• Prudential
• Standard Life
• Friends Life (merged with Aviva)
• Reliance Mutual
• B&CE
• Retirement Advantage