Road Bike or Mountain
Salesman: Certainly you should upgrade you bike. You will go faster, further and leap tall buildings in a single bound. Woman will throw themselves at you, men will be intimidated by you masculinity. 

Financial Advisor: Buying a bike worth 5 times as much to do the same job your current bike does is not a prudent financial investment. You should stick to the bike you have that is working perfectly well for you. 

I cannot tell you who to listen to. What I will say is  £120 is a pretty cheap bike (BSO) and it would almost certainly be better to spend money on a better bike than upgrading it further. If you are happy with your current bike, I suggest start saving for a new one then ride the old one until buying a new bike is less about worry about what it costs and more about looking forward to riding a better bike.