But, don't forger that if they refused to grant you a RC on the basis of your wife NOT exercising Treaty Rights in any of the categories (Worker, Self-Employed, Self-Sufficient, Student) then 5 years will only start from the time she started to exercise the Rights. Plus, you state your wife stopped working for 2 years!!!! That's bad, really, as you would have had to take out comprehensive sickness insurance in order to continue exercising treaty rights.
As there is a BREAK in your case, the whole thing will have to start all over again. Unfortunately, many people get caught out this way. All that is required at the time was a medical insurance, which many people don't have a clue about. So, you won't be able to prove that you should have acquired PR and hence a year after that you won't be able to apply for Naturalisation.
The ONLY way out is to go to an Appeal and argue that it's disproportionate to punish someone for not having a medical insurance
Directive/2004/38/EC wrote:giolondon
No reason not to apply for PR. And at the same time apply for naturalization.
Note that PR comes 5 years from the time you and your spouse settled in the UK or married in the UK. It is not from when you got your Residence Card.