UK insurer Prudential said it has decided not to proceed with a plan to reclaim £8.7 billion in surplus assets that have built up in its with-profits funds.

Under the plan, Prudential policyholders would have received a one-off payment in return for giving up the right to future income generated by the estate and Prudential would have gained greater flexibility over how it was used.

Prudential said it had concluded after a "comprehensive and extremely complex analysis" that reclaiming the so-called inherited estate would not be in the long-term interests of either policyholders or shareholders.

"Our overriding priority is to maintain the long-term financial security of the with-profits fund and to continue delivering strong performance for the benefit of our policyholders," Prudential's UK and Europe chief executive officer Nick Prettejohn said in a statement.