Protected Rights Annuity For Widow

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MoneySaving Newbie
Unfortunately my stepfather has just passed away and I am in the process of helping my mum sort out his estate.

He had a Contracted Out Pension Scheme with B&CE (Building Industry Pension Sceme). The value of the pension fund is approx. £5200. My mum has received a letter stating she needs to obtain a "protected rights annuity" in order to provide her with a pension. They advised on the phone however as the fund is small (trivial in technical terms) she might be able to take the cash as a lump sum in order to settle any debts.

My question is a) is she better off trying to get a small annuity (£300 pa is the best quote we saw). or

b) is she better off trying to get the fund out as a cash lump sum. If this is the best scenario, how/who will give a quote saying that the fund amount is too small?? Are there any other implications for taking a lumps sum, e.g. tax.

Since investigating annuities, I have seen that there are new rules being implemented from April 2006 which would mean a lump sum is possible. Is it possible to defer making a decision on his estate until then?

Any help anyone can provide would be greatly appreciated.
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