My ds was lime in spring term reception, and free reader by summer term. (His school only goes up to lime in KS1.)
For reading aloud homework, he just read anything he wanted, school library books, home books, library books.
They also used bug club, which also goes up to lime in KS1, he kept reading lime books for those, but he was given more than 100 books to choose from, and he read most of them twice, some three times during KS1. His comprehension wasn't as strong as decoding, so it was fine to read short lime books online and answer comprehension questions, and he's done it mostly to get rewards.
We also started using readtheoty for more advanced reading comprehension as well.
For guided reading, he was grouped with lower levelled children, but choice of books were quite interesting, and comp was his weakness, so he enjoyed it, I think. And during yr2, some children caught up, so more appropriate books were chosen for his group.
In yr3, he was given ruby, but school is not so worried about levels and he still reads what he wants.
In bug club, he is reading ruby books, but he doesn't really enjoy reading those books which some of them has 200+ pages with tiny letters online, so he only reads a chapter a day.