To improve your gaming performance, for 1080p, GTX 1060 is best choice. Though, due to Ethereum mining craze going on currently, getting a GTX 1060 is hard, especially at reasonable price. So, going for GTX 980 at current date is more reasonable.
To improve your gaming performance, you'll benefit more from new GPU than new CPU.
If you want to go with new CPU, i5-4690K, then you're looking towards new MoBo (Z97 chipset) and new Windows license too. But you can re-use your DDR3 RAM. Though, once you're upgrading, better go with i5-7500 and B250 chipset MoBo or i5-7600K and Z270 chipset MoBo with DDR4 RAM.
Non-OC CPU-MoBo-RAM combo with stock speeds of RAM:
PCPartPicker part list /
Price breakdown by merchant
CPU: Intel - Core i5-7500 3.4GHz Quad-Core Processor (£172.50 @ Aria PC)
Motherboard: MSI - B250M MORTAR Micro ATX LGA1151 Motherboard (£79.88 @ More Computers)
Memory: Corsair - Vengeance LPX 8GB (2 x 4GB) DDR4-2400 Memory (£63.84 @ Aria PC)
Total: £316.22
Prices include shipping, taxes, and discounts when available
Generated by PCPartPicker 2017-07-12 19:05 BST+0100
OC capable CPU-MoBo-RAM combo with proper CPU cooling and high speeds of RAM:
PCPartPicker part list /
Price breakdown by merchant
CPU: Intel - Core i5-7600K 3.8GHz Quad-Core Processor (£209.99 @ Aria PC)
CPU Cooler: ARCTIC - Freezer i32 CPU Cooler (£23.95 @ Amazon UK)
Motherboard: MSI - Z270M MORTAR Micro ATX LGA1151 Motherboard (£119.97 @ Ebuyer)
Memory: Corsair - Vengeance LPX 8GB (2 x 4GB) DDR4-3000 Memory (£68.88 @ Aria PC)
Total: £422.79
Prices include shipping, taxes, and discounts when available
Generated by PCPartPicker 2017-07-12 19:12 BST+0100
Note: Arctic Freezer i32 is 150mm tall and i don't know if it fits into your case or not. If it doesn't, you can re-use your AIO to cool the K-series CPU if you like. Though, single slot AIOs do perform worse than most CPU air coolers.
(My i5-6600K in my Skylake build is also cooled by Freezer i32 with 2x Corsair ML120 Pro fans in push-pull, full specs with pics in my sig.)