Right, it could be a reasonable upgrade for your PSU, but that is entirely up to you.
With a £400 budget I would recommend something like this:
https://uk.pcpartpicker.com/product/7RKhP6/gigabyte-geforce-gtx-1060-6gb-windforce-oc-6g-video-card-gv-n1060wf2oc-6gd
You could also go for this to spend your entire £400 budget:
PCPartPicker part list:
https://uk.pcpartpicker.com/list/ZQrV2R
Price breakdown by merchant: https://uk.pcpartpicker.com/list/ZQrV2R/by_merchant/
Memory: Corsair Vengeance LP 16GB (2 x 8GB) DDR3-1600 Memory (£85.80 @ Aria PC)
Video Card: Gigabyte GeForce GTX 1060 6GB 6GB WINDFORCE OC 6G Video Card (£238.98 @ Ebuyer)
Power Supply: EVGA SuperNOVA G2 550W 80+ Gold Certified Fully-Modular ATX Power Supply (£76.84 @ CCL Computers)
Total: £401.62
Prices include shipping, taxes, and discounts when available
Generated by PCPartPicker 2016-12-12 10:54 GMT+0000
The second option is completely optional, the RAM Upgrade could be ruled out and you could get a single stick of RAM that could cause compatibility issues, as they may not run together even if they're the same make/model, but I think you'd be fine on 8GB.
The PSU is also completely optional, as your PSU isn't overly 'Terrible' but most people wouldn't recommend it for gaming.