Hi Nathan,
Great to hear you're going to South America! Your planned budget of £3500 is sufficient to travel 4 months in South America so you shouldn't worry about that. Backpacking in South America is not expensive. With a daily budget between USD15 and USD30 all general costs, such as food, transport and accommodation will be covered.
You will only have extra costs when you want to visit some of the breathtaking attractions South America has to offer. i.e.
Galapgos Islands in Ecuador,
Machu Picchu in Peru.
Traveling overland from Caracas all the way to Rio in 4 months can be done without rushing if you consider taking a flight somewhere in your itinerary. Distances are enormous. Bus rides can take up to 24 hours. Don't forget you will be traveling in the Andes. Transport is slow up there.
You'll have a great time in South America. Keep us posted!