If either airline is willing to sell you a combined ticket for the short connection, then you will be protected for a mis-connect and would end up on the 16.20 anyhow.

Question is whether you want to pay more for the option of the 11.50 knowing that you might not make it.

Keep in mind that the actual flying time between London and Madrid is between 1:45 and 2:00 hours. Iberia in particular pads their scheduled flight times quite egregiously in order to subsequently claim a high on-time performance ranking.