I’m a teacher and would have said Y3. With writing, it’s important to teach the different elements separately (i.e. handwriting, composition, grammar, spelling). Dictation is tricky because it requires focus on grammar, spelling, listening, and comprehension. If you are worried about her handwriting, try to encourage separate handwriting practice where that is the sole focus. To relieve pressure, I would try creating a calm environment, maybe buying her a fancy pen she picks out herself, and setting a very manageable target that’s communicated in advance - for example two to three sentences or copying a short poem. The text is set out in front of her, she knows exactly what she has to do and when it will be finished, and it’s achievable.
Other things can then be worked on separately. For example, if you are focusing on grammar or descriptive adjectives, don’t worry about the handwriting and focus just on the specific objective of that session (commas, description, etc.)
Children make phenomenal progress with their writing in KS2, but where it goes wrong is where too much is expected of them at once. Writing is a very complex skill which is actually a whole bunch of skills mashed together. When they can focus on each element, and it feels achievable, things will come together and their writing as a whole will improve.