You must be every salesman's dream. Easy to oversell. I bet you would do just fine with 256 MB. The benefit of a VPS is that you can change how much memory you're allowed to allocate while it's running, so it's just a matter of contacting the sales department asking for an upgrade.
Why would you pay for something you don't need? Especially seeing as you've got a £20/mo max. Reaching that will be much easier if you scale down your requirements to something realistic. There is no way you'll need 1 GB (or even 2 GB) memory if you don't even have any traffic yet.
Also, "unmetered bandwidth"? That's not going to happen. At least not within your price range.
Indeed however I would never recommend 256MB for a vps. Instead I would recommend around 400MB to 512MB of ram. Also some Operating Systems will require more ram than others and so if you think you don't need 400-512MB of ram then shared hosting would be the better option.
Also I myself have 750MB ram on my vps and it seems to be pritty good but for something like calculating pi to the last digit or a rainbow/hash table generator that generates 96^6 hashes for reverse lookup then around 1GB would be needed for effective results. Yes I am really wanting an upgrade with my current host but it's been a decade (3 months) since they had vps plans available and am waiting for the new cheaper better plans (Jumba).