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Hello all. I am currently in process to start the UK settlement process of my family and I am in dilemma which way to go. I have elaborated my condition and queries below:

Current status:
Husband – British citizen (on feb 2018), route – tier 2 general – ILR (on Oct 2016)
Wife – Currently PBS dependant – entered UK on Dec 2014 and completed 5 years Dec 2019
2 daughters age 8 and 5 – visa status same as mother. Both kids are born in India.

I have two options for settlement and citizenship for my family.

Option 1: Get ILR for wife. Apply MN1(Register child under 18 as British citizen
) for both kids. Then apply naturalisation for wife after a year.

Option 2: Get ILR for all 3 and then naturalisation next year

My questions are below:
1) Fees wise option 1 is better but legally which one is better?
2) If I go option 1, it is said in guidance that the kids will have to do naturalisation when they reach 18. So what will be their status after MN1 application is successful? Will they be British or any other intermediary status?
3) What if children are unable to do naturalisation at 18? will their citizenship be revoked?
4) If the kids MN1 is successful then do we need to surrender Indian citizenship for kids? Or at 18 when they undergo naturalisation?

For you not much difference as the kids were born in India so they have always had UK citizenship as the second one and will have to declare prior citizenships for their whole life.

Definetely go for the economically viable route. MN1 gives the children full british nationality and they do not need to naturalise when 18 (where did you read that?).

P.S. the kids would need ILR first if i understand correctly.

They expect kids born overseas to have ILR first before registration.