Why does my iPhone say "Unable to Communicate with Apple Watch"?

Today I picked up my new iPhone 13 Pro Max. I started to set it all up and successfully paired it with my Apple Watch etc. I have updated iOS so phone is running version 15 and watch is version 8. I cannot, no matter what I do, get my phone to respond without error when I try to click the option for "Unlock with Apple Watch". Every time it says "Unable to Communicate with Apple Watch". I have followed all of the instructions I have found here and elsewhere to try to get it to work - I've disabled the passcode, re-enabled it, rebooted both devices, I have taken off the option to unlock watch with phone (then rebooted everything), I have unpaired the watch and then repaired it... nothing is working! I have turned Bluetooth on and off, and just about everything else on and off. Still nothing works. Help! What am I missing? This feature worked perfectly with my old phone (iPhone XS Max) but the 13 just isn't coming to the party. Can anyone help? Thanks :)