May have spoken too soon. After a few hours the issue came back. Sorry guys.
This is driving me mental. For the money iPhones cost and Apple's self-smug attitude about making the best products in the world, we're having to delve into the bowels of the phone to enable the simplest of functionalities.
I'm happy to be people's guinea pig -- I'll keep trying and let you know what does/doesn't work.
Really pleased to see everybody's feedback and I'm at least reassured that I'm not alone.
Thank you all for reading through and I hope we'll all get a fix for this issue.
One more item that effected wifi with iOS 8 is the 5ghz wifi band. Seems there was an issue with the 5ghz wifi drivers that caused slowness and disconnects on 5ghz but setting router to the 2.4 worked fine. That seems to have been resolved with 8.1 for most folks. (mostly iP6 users had this issue). If you are using 5ghz wifi try and change your router to 2.4. This is a workaround and troubleshooting process for the moment. If it works then you are closer to resolution. Either Apple iOS update or router firmware update to resolve it.