Faye_and_Brian,
This is what is stated on page 4 of the FLR(M) Guidance Notes (Version 07/2010)
14 YOUR STATUS WHILE YOUR APPLICATION IS BEING CONSIDERED
If you and any children under 18 apply before the end of your permitted stay in the UK, your/their existing immigration status, including any permission to work, will continue until your/their application(s) is/are decided.
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