Am I being delusional?

Definitely option 2. I think you need this.

Option 2
The only thing I would be wary of is if you moving in would disrupt UC (if they get it)for your uncle and GM - though I realise you could make up the shortfall with your wages.
You may actually be entitled to some UC yourself even while living there which could be a help for a while getting on your feet. Remember you can have up to 16k of savings before UC is stopped.

I'm option 2.

This could be your only opportunity to really knuckle down and save to secure your future. DD is super young. She will be absolutely fine.

If you're worrying about failing as a mum, it usually means you aren't!

Option 2.

Good luck!

Option 2 so you can save. At 5 children will happily adapt to a new school and make friends. She’ll more than likely really enjoy the extra company of your uncle and grandma and actually, it’ll be fun sharing a room (and easier at 5 than any other age). The lack of your own space and privacy for a couple of years is a small price to pay for future financial security.

Whichever way you decide I wish all the best for you - it sounds like you’ve got your shit together and are a great mum, who’s prepared to make sacrifices short term for a more secure and settled childhood long term and better future for you both.

Your child is only 5, they have only been going to school for 6 months in all, changing schools is going to have very little or no impact. Children are very adaptable, you can definitely move on without guilt.

Option 1 or you’ll be looking after everyone.

Option 2.

• she will make new friends easily at that age.

• you can save lots of money for deposit which you won't be able to do while claiming UC. Even if you could, they'd stop it once you've got a certain amount in bank. Like you say, you can move forward in life and secure your future.

I'm doing option 2 as we speak. My daughter loves the nightly 'sleepovers'. This is a really good opportunity for me to get us on the housing ladder which I will never get again.

Benefits (potentially for the long term) vs living with family and saving is a no-brainer.

The fact that you are even considering a life on benefits (or certainly for some time) because you don't want to your child to move schools or have the discomfort of living with other relatives is whack.

What a bloody horribly ignorant comment about dementia!!!!
sorry op - to butt in - but thats a horribly ignorant and ableist comment,

imo - option 2.
what a lovely gift to give your child to have two more amazing people to help raise her!

I would go for option one just because I can't stand to live with anyone except my kids and dh(well tbh it's hard with him at times).

But if I was a more social open human being and gp and uncle are nice then option 2 would make sense.

As for school- no problem at all changing at that age!

You don't sound like a control freak at all, OP, you sound like a good mum who's taking your daughter's happiness and future stability seriously.

I'd also say option 2.

Option 2

My mum was in this situation when I was little too. Insecure housing meant that I went to 14 schools. As an adult, I have no friends from school, but I’m good when meeting new people.

We lived in one room with a stranger we rented from, share houses and eventually, also in one room with a grandparent. Mum did eventually save that deposit for her own place too, it was her greatest achievement. It provided secure housing for both of us and a great place for her in old age too. She didn’t have much money, but she had her home and I inherited it.

I’m also a teacher and sometimes moves can’t be avoided. Now, while your daughter is small, will be much less disruptive for her.

Good luck with getting that deposit together, it will be worth it.

Sorry, meant to add, good luck for the future :-)

Changing schools should be fine with authorities, people move all the time. Personally speaking, I found changing schools fine and did so until I was 11, changed 6 times. Much like you, dad was building a secure future for the family.
My eldest brother though changed just before his final qualifications and found that more of a struggle but he did still do well with grades.. The nice side of changing schools for me is that it made me fairly confident, as had to keep making friends. That's no bad thing, having a bit of confidence.

Personally speaking, I think it's ok until secondary school, when they're starting to head towards qualifications.

I would not want to share a room with a child who could be 7 by the time you move again. Will you disturb her sleep every night when you go to bed? As someone who moved schools every 2 years throughout primary / juniors I was OK, however my sibling was not, hating every move. Yes children are resilient but losing all your friends and having to make new ones (especially aged 7 when friendship groups are usually well established) is hard.

Moving schools in reception would be absolutely fine. Kids change friendships and groups all the time at that age. I wouldn’t worry about that part at all.

The main concern would be being absolutely sure that you will all get on ok living in the house together. People forgot how hard it can be having a small child in the house. How often do you visit / stay there at the moment. Does Gran get tired easily, do you all have places to chill / watch TV without being in each others space. If you can truely answer yes to this, then I’d go for it for a set time to build your secure future. (I’d probably try and avoid a second school move though).

Option 2

There are good sides you have not considered for option 2, Your little girl will probably love sharing a room with you. My nine-year-old still asks daily if you can sleep with me And to be honest, I love it when she does ❤️

I think it's better to live with other grown ups, whether that is a partner or other family, when you have a young kid because they could help in an emergency, and give her different ideas and perspectives. It also means you won't be the only adult (outside school hours) that will be permanently responsible for her, and you could get a tiny bit of time for yourself.
She will quickly get used to a new school, and will have different adults to play games with.