My DD learned to blend, and read basic words before starting school. However her school reception have only just started phonics so she has not been doing any reading for the first half of term. Feels as though our school is the last in the country!
DS learned all the phonic sounds in the autumn term of reception and by the spring term was beginning to blend them. It seemed to take him a while to blend and I worried he was slow at the time but he soon took off with reading once he could blend and is now a good reader.
I really wouldn't worry too much about the blending now as it is still early days in reception. Try to help your child learn the phonic sounds by reinforcing the sounds learnt in class at home such as "s" (snake). Then once they get the hang of blending they will quickly progress (due to knowing the phonics) - am not a teacher by the way this is just my experience as a mother.
I have rebelled today and allowed DD to read a Peter and Jane book (non phonic, not pc!) as while she is waiting to do phonics at school I thought it would be useful for her to learn a few tricky words!
I do like the phonic system on the whole but there are so many exceptions.."said", "was" etc.