What are the prerequisites to apply for UK citizenship or permanent residency?

To become a citizen or permanent resident, the UK wants to ensure you can participate fully in society. That's why demonstrating a good understanding of British life and possessing adequate English language skills are essential. Think about it: being able to communicate effectively and understand the cultural norms is crucial for integrating into any new country. The "Life in the UK" test itself assesses your knowledge of British history, values, institutions, and traditions. Passing this test, along with proving your English language proficiency through an approved test, shows you're prepared to contribute to and engage with British society. While having a driving licence, TV licence, or bank account might be useful in daily life, they don't demonstrate the fundamental understanding and communication skills needed for citizenship or permanent residency. These are practicalities, not indicators of integration. The core requirement is demonstrating you understand and can participate in British life.
Think about the usual requirements for assimilating into a new country - understanding its way of life and speaking its language.