Customers with drawdown pensions at Standard Life have amassed £10bn in assets under administration, suggesting the schemes are becoming a serious alternative to annuities.
The company said income drawdown has been increasing in popularity and it believes the level of assets is evidence they have started to rival annuities.
Alastair Black, head of customer income at Standard Life, said customers like drawdown because they want ownership of their own pension pot and more control.
With gilt yields staying at 3.25% there is in no change in income limits for drawdown users this month.
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The GAD limit, the calculation to determine the amount of income drawdown users can take, will have increased to 120% for all drawdown users by March.
This change was introduced over a period of a year by the Government, which will give drawdown users more choice about how and when they take their income.
Mr Black said: "Drawdown is rightly becoming more popular in relation to retirement income.
"When people are told how drawdown works many choose to take this option, knowing they can annuitise their fund at a more appropriate date.
"With the move away from final salary and defined benefit schemes towards defined contribution, customers want to take ownership of their own pension pot and have more control."
He believes the UK is likely to follow in the footsteps of America, Canada and Australia, where drawdown is popular.