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2500k system, continue upgrading GPU?

I would grab a 2700k, eBay/CEX have from for about £70, overclockers it and squeeze a bit more like out of your system, along with the 1080ti of course
 
Get a used i7 2600k for around £80, overclock it to 4.5 GHz, sell your i5 2500k for £30+, that's a £50 upgrade that's gonna give you a nice boost in minimum frametimes.

Then hop on MM and grab a nice 1080 Ti for under £500.

A better option than either of your OP considerations.
This 100%

That will be a nice increase, and will do for the life span of the rig, until you re build
 
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