Unable to pair iPhone 7 with series 2 Apple watch

Hi, i am trying to pair my iphone 7 which has the latest IOS 14.8 installed with my Apple watch series 2 which was unused for the last year. while trying to pair its throwing up a message "To update the software on your Apple Watch, you first need to update the software on your iphone". I've tried resetting the phone multiple times but it doesnt work.