Okay, I just want to give an update on this.

One member of the immigration boards forum sent me a private message earlier regarding the English test concerns we have (I joined that forum when I was waiting for my FLR(M) so I can post my inquiries on their forum too). Anyway, I posted my same concern here on that forum. This member told me that he called the UKBA Croydon office and asked my inquiry in behalf of his wife (who has the same issue as me). The UKBA staff told him that "when it comes to settlement application the valid period of the language exam does not apply. Such valid period only apply to entry clearance applicant. Even though the qualification has expired if you apply for the settlement in UK it does not matter". But knowing the fact that UKBA staff say different stuffs all the time, I told him that I'm going to email my MP for him to inquire to UKBA so I have a written statement from them just in case. He said that he will do the same to be on the safe side.

Maybe the others here can do the same so we can really get a written answer. This would be a big peace of mind for someone who came here already having an English test with B1 level or above even if the test cert is already expired. Coz like what has been said before, I don't think someone's ability to speak English would downgrade once he/she comes to the UK.