I discovered today, by phoning Immigration, that we can allow my wife's passport to expire this summer and still apply successfuly for citizenship. As long as she keeps the expired passport, complete with ILR stamp etc. In some respects it seems hardly worth renewing in June if she goes for Citizenship in October as if she gains a new passport then it will be cancelled at the aquisition of Citizenship.
I believe its for an indefinate period as well. My wifes philippine passport expired in feb this year. Granted she got her citizenship in august last year, but as you say as long as she keeps the passport your ok. I know coming into the philippines they didn't even ask to see the wifes philippine passport. Just handed over her brit one, I got a 12month balikbayon stamp and thats it. This leave hopefully we'll be getting her dual nationality sorted in manila at the main BI. I know there it doesn't matter if the passport has expired.