The 256gb upgrade option is only £90 - but they're charging three times the price of this (£270) for double the storage with the 512. That doesn't make sense to me.
When you go Fusion-to-SSD256 you're no longer getting the 1TB HD, which is probably "worth" at least $100 including Apple Upgrade Tax. Unfortunately, Apple's SSD prices are gouge-y even alongside comparable fast NVMe products.
That's what I'm thinking 256 wouldn't work at all. 512 would be the minimum.
So, on my 2017 iMac, my Apps/System/Library files come to about 160GB and that includes Xcode, Logic Pro X (with full sound library - about 60GB that could be re-located to external storage if needed) FCPX/Motion etc. (not used much - I got an education deal so it was as cheap to get the full Pro bundle than just logic) full MS Office and more. Yeah, I do a bit of everything. Having that stuff (plus temp files, swap etc.) on fast SSD is what gives the biggest speed boost. 256GB is do-able if you keep most of your 'user' files on external.
I actually went for the 1TB SSD (education price again) and so far I've yet to use 512GB of it. 256GB would be slightly inconvenient but worse things happen at sea. Having to choose is the price of having a Mac without upgradeable internal storage.
Unless I suddenly come into some money the Mini is probably going to get the job.
The value of the Mini vs. the 5k iMac depends a lot on what you expect from the display - adding a 5k display to the Mini will cost about £1200 and even a
decent 4k display fit to breathe the same air as the iMac will cost £600+
On the other hand, the Mini gives you a choice of displays and, odds are, it will work usably with your old display, and you can worry about upgrading that later. Only caveat is that larger (and cheaper) 1080p displays aren't the best match for the MacOS UI - the system fonts, menus, icons dialogs all come out a bit large. If you're buying a display and won't stretch to 4k/5k either go smaller than 27" or 2560x1400.
I've seen a few reports here that the 8GB Mini can be a bit sluggish running 4k/5k displays but upgrading the RAM helps - not surprising, since the weak spot of the Mini is its GPU which takes its video RAM from the main memory - and high res displays mean quad-size framebuffers. Something to consider if you're contemplating getting a high def display in future.
Also bear in mind that upgrading the RAM in the Mini is a major operation requiring total disassembly and always involves
replacing the existing RAM - whereas it is an absolute cinch to pop open the little door and
add another pair of RAM sticks to the 5k iMac's empty slots.