There will be any number of opinions on this, but here are some pointers:
Not working gets quite demoralising.
You can get promoted/noticed even if you start right at the bottom again. People who turn up on time, dress tidily, don't frighten the customers and work hard soon rise up any organisation.
Given that even the minimum wage will bring in £1000 a month, and you won't be entitled to JSA probably, then not working is expensive.
If you take a job with much lower pay and responsibility than you ultimately want - because that's what's available - are you 'setting your level'? - I don't think so. You are feeding your family. It's tough out there and everyone respects a grafter.
Will it make obtaining a better paid job more difficult in the future when the recruiter asks what salary you are on now (ignoring your previous military salary)? Not working for a long period will frighten them so much you won't even get an interview.