The manual says:
It is recommended that the immersion heater thermostats are set to between position 4
and 5 (60C - 65C), however they can be set between 1 and 5 (10C and 70C).
So you should be OK with is where it is in the pic.
There are two immersion heaters the lower one heats the whole cylinder, the upper one just the top part. The lower one is normally controlled by a time switch so it only comes on at night when electricity is cheaper (if you are on the Economy 7 tariff). The upper thermostat is used during the day to "top up" the cylinder, if necessary.
This begs the question: why are you heating the cylinder by electricity when it can, normally, be heated more economically by the boiler?
Fairly safe to assume there is no boiler