Magnetic letters are great to use as you not only see the shape of the letter but can feel it.

There are a number of ways that you can use magnetic letters to support reading and spelling for example:-

Make and break a word - build the word then break it up and rebuild it.
Letter sort - sort out letters that are the same or from the same handwriting family eg curly caterpillar letters - a c d e g o q

How to play:
Choose 4-6 words from your child's reading book.
Write each word onto a separate card or piece of paper.
Then place all of the cards face down on a surface.
Take it in turns to turn 2 cards over and blend the graphemes to read the words aloud.
If the words on a pair of cards match, you keep the cards.