Contacted Nvidia Regards to GTX 970 3.5GB Limit...
As the title says. I also ran the Nai Benchmark and as expected my graphics card also replicates the bandwidth drop.
Went over to the Nvidia chat and this is what they said.
Hopefully this will be a little insight for you guys! 
 
 Sanjib: Hi, my name is Sanjib. How may I help you?
 Andi M: hi there, i've recently installed a nvidia gtx 970 to my system
 Andi M: i believe i have come across a hardware fault
 Andi M: as a few raster engines on the gtx 970 have been turned off in comparison to the gtx 980
 Andi M: i have results confirming they are tampering with the 970's performance once it breaches over 3.5GB of VRAM
 Andi M: if for example the 970 sits on 3.4gb of vram, my overclocked gigabyte g1 970 can hit 400gb/s bandwidth give or take
 Andi M: once 3.6gb is consumed, it plumets to 6gb/s of bandwidth and any game that's being played becomes unplayable
 Andi M: this is on majority of games that reap more than 3gb of vram, for example Shadow of Mordor, Assassins Creed Unity, Crysis 3, Ryse: Son of Rome, Far Cry 4 and Battlefield 4
 Andi M: these are at 1440p or higher resolutions
 Andi M: now the gtx 980
 Andi M: when it hits 3.6gb of vram, the bandwidth being processed doesn't go
 Andi M: it maintains 500+ gb/s bandwidth
 Andi M: because of this, this is technically fraudulent marketing, i am technically only getting 3.5GB of effective VRAM for a card that's "marketed" as 4GB VRAM 
 Andi M: am i in my right to return the card as faulty hardware? my card also seems to have quite a lot of coil whine also.
 Andi M: i have discovered these findings with multiple benchmarks including one called "Nai Benchmark"
 Sanjib: Yes, Andi
 Sanjib: This is a known issue and we are aware of it
 Andi M: is this definitely hardware related and not driver? 
 Sanjib: I am sorry, right now I am not sure if this is hardware or software.
 Sanjib: We are currently investigating this. 
 Sanjib: Shortly we will have an update on this.
 Andi M: ok
 Andi M: so if im to return my card
 Andi M: i no longer have anything to revert to and i assume this problem would only persist on a GTX 960 too.
 Andi M: what's nvidia's stance by being upgraded to its bigger brother (980)
 Sanjib: Until or unless we test this issue and have a proper workarount for this, I will not be able to comment on this
 Andi M: ok, i assume for now until a decent official statement from Nvida, it's up to the suppliers discretion?
 Andi M: or at least will they still be forced to refund in full?
 Sanjib: I am sorry, for that you will have to check with the retailers.
 Sanjib: But I do not think they will confirm anything till there is any official update
 Andi M: indeed, I am sure Overclockers.co.uk will be helpful
 Andi M: are you in good relations with them?
 Sanjib: Not sure what do you mean by good relations, if there is any issue with the hardware surely they will be able to help you with it
 Andi M: thats great