I got thinking about the pros and cons of premium bonds .Started me thinking about the TAX on savings.
There must be some TAX advantage otherwise the government wouldnt put a £30,000 limit on them..
I realise earn over £36,400 and you pay 40% tax on your savings.

Question Does the gross interest earned on savings add to your income. For example:


1: Earn Below £36,400 with £100k in the Bank @ 6% = £6000 taxed - 22% (£1320) = £4680 in your hand or does it work like this.
2:Earn £36,400 +£6000 (interest) taking you over the 40% so £6000-40% (£2400) = £3600 in your hand..

The reason Im asking is that Im new to this working 9-5 x 5 days a week. Used to work self employed and only work 6 months of the year for the last 15 years so kept well below any limits quite easily. I dont actually need to earn much money at the moment so i am working out how to get myself below the 40% tax bracket and wether it will be an advantage.