My daughter is 6, nearly 7 and has been comfortable with red level 2 readers only for the last month. She took ages to learn colour names and recognise letters but we took it at her pace and now things are really clicking. We're reading a book a day at a comfortable level for confidence, she is really excited to have books she knows she can definitely read to herself and I extend her through a harder book at least once a week.
She used to get really angry with herself at not being able to recognise letters so we eased right off, concentrated on a few, played loads of games and so on and kept reading to her all the time and pointing out the letters she knew, simple words she knew. Home educating gives us the space to do that.
When she was ready, the difference in her spirit was obvious - so much more cheerful about trying and not so discouraged by mistakes. She's got a long way to go, and I do suspect something like dyslexia is in play, but now we're moving and the difference is noticeable daily!
She's my youngest. The oldest also took ages to move into security with phonics and moving through to reading fluently. For him it was about the same age that it clicked and he's unstoppable now. My middle child clicked much earlier but hasn't liked or enjoyed reading (apart from the rare perfect fit book) until the last week when e's realised he can get ahead with Harry Potter himself. He's 8.5.
There's time for her to click yet, but keeping the conversation open with others who work with her is wise.