my daughter could only spell phonetically - which is how they teach children (phonetic alphabet).
We didn't do very well in SATS for spelling, but we did what we could.The main thing was to keep her confidence and not destroy her in the process.
We played hangman, sang the letters, made up games and tried all different ways to get the words in. We did short tests and put the effort in. So, we did well in the class tests.
Unless your preparing for a school application, I wouldn't worry - SATS do not make a difference when you get to secondary school.
Make lists of words your son can do well at, build some confidence and don't put so much pressure on.
Now my daughter's reading more, she's writing better.... I think she just wasn't ready at that age.
I'm sure by the time he's older, he'll be fine. For now - try and keep it stress free and confidence up. IN my opinion that's more important.