I am involved with this area and am actually authorised to give advive. In the past the "choice" was to buy an annuity. Annuities are now widely seen as poor value, due to low interest rates and longevity.
Added to that, the "fund" died with you.
There are now multiple options, and they can be quite complicated.
Yes, it is true that using Income Drawdown you could effectively strip out your fund tax free (assuming you have no other income), but why should you do that? The money is already in a tax-advantaged environment plus the death benefits could well be better where it is now.
Obviously I am not going to offer specific advice because I know virtually nothing about you, and what you should actually do is dependent on your personal circumstances and attitude to risk.The thing about paying for advice (the fee was not unreasonable IMO) is that you know that you will have had all options assessed and you are also protected if something goes wrong. If you DIY it, it could end up costing you far more than the 2%ish you've been quoted and you have no comeback if you make a mistake. It is also essential that you deal with an INDEPENDENT Financial Adviser as somebody working on behalf of one or a limited range of firms may not have all the options available.
The changes that have been brought in and continue to happen are designed to move people away from annuities. As far as I'm concerned, and I can only talk about me, there is no way on earth I would buy an annuity.