hi Ron
sorry to hear about the job.
it seems you are allready on public funds and £70 a week may not streach it, having a child to support will add to the problem, i think government funding is about £90 for a couple a week. The £12,500 in the bank may help but eventually will run out. Unless you can find a job/part time job or your wife is able to work with qualifications or can provide a letter of a job offer will look better. you also have the task of the council allowing the extra people in the flat. Sound really unfair, especially you being ex-military, Yes border Agency may be able to advise further but they wont give you a definate yes or no. I wish you all the best, remember eventually if will come good.
Sammy