Heat the oven to 350°F (175°C). Thoroughly grease and flour a 10- or 12-cup Bundt pan, making sure to coat the ridges and center tube.

In a large bowl, combine the yellow cake mix, instant vanilla pudding mix, eggs, sour cream, vegetable oil, and water. Beat on low speed until the ingredients are moistened, then mix on medium speed for about 2 minutes, scraping the bowl as needed.

Fold in about 3/4 cup of the English toffee bits and the chopped pecans or walnuts if using. Stir only until the additions are evenly distributed so the batter stays soft.

Pour the batter into the prepared Bundt pan and smooth the top. Sprinkle the remaining 1/4 cup of toffee bits over the batter, or reserve them to decorate the cooled cake.

Bake for 45–55 minutes, beginning to check at 45 minutes. The cake is ready when a skewer inserted near the center comes out clean or with only a few moist crumbs; if the toffee browns too quickly, loosely cover the cake with foil during the final 10–15 minutes.

Let the cake cool in the pan for 10–15 minutes, then carefully turn it out onto a wire rack. Cool completely before slicing, then dust with powdered sugar or drizzle with caramel sauce if desired.