Hello Mattyc84,
Thanks for asking the Apple Support Communities for help with updating your Apple Watch. Please try the following steps, testing after each one:
If you see an alert about not enough space, please check this help article: If you don’t have enough space to update your Apple Watch - Apple Support
Update the iPhone: Update your iPhone, iPad, or iPod touch - Apple Support
Try setting up the Apple Watch as new instead of from a backup: Set up your Apple Watch - Apple Support
Forget the Wi-Fi network the iPhone is connected to and then reconnect: How to forget a Wi-Fi network on your iPhone, iPad, iPod touch, or Mac - Apple Support
Verify the date and time on your iPhone are set correctly for your time zone: If you can’t change the time or time zone on your iPhone, iPad or iPod touch - Apple Support
If you use VPN or security software on your iOS device, it may be interfering with the pairing and activation process. Try disabling or removing it temporarily, and restarting your device. If you are unable to remove or disable it, check with the VPN or software provider for more information: How to contact an app developer - Apple Support
Check the iPhone Settings > General > iPhone Storage for an Apple Watch software update. If one is found there, swipe left to delete it.
Reset the Apple Watch using the steps here: If you forgot your Apple Watch passcode - Apple Support
Delete and reinstall the Apple Watch app on the iPhone: How to delete apps on your iPhone, iPad, and iPod touch - Apple Support
Temporarily disconnect (not unpair) any other Bluetooth accessories connected to the iPhone.
Test with the iPhone connected to a different Wi-Fi network. Make sure it meets these requirements: Recommended settings for Wi-Fi routers and access points - Apple Support
Reset Network Settings: If you see No Service or Searching on your iPhone or iPad - Apple Support
"Go to Settings > General > Reset > Reset Network Settings. This also resets Wi-Fi networks and passwords, cellular settings, and VPN and APN settings that you've used before."
Thanks and have a wonderful day.