Martin Lewis explains how to turn £800 into £5,400 or more

Money-saving expert Martin Lewis has shared his advice on how to transform a relatively modest sum of £800, or even less, into a hefty £5,400 by following a simple eight-step process.

The financial guru known for his regular TV, radio, and podcast appearances insists this 'trick' could work for anyone aged between 40 and 73. Contributing to the latest newsletter for his MoneySavingExpert website, Martin offered a step-by-step explanation of the strategy, reports Wales Online.

He advised, "There is a potentially unbeatable opportunity everyone aged 40 to 73(ish) needs to consider. You've got until 5 April 2025 to buy back any missing national insurance years from 2006 to 2016. This can be prove very lucrative, as some are on course to make over £50,000 in boosts to their state pension by following this guide."

Read more: Martin Lewis gives best time in the year to claim money back from energy provider

He also highlighted the importance of considering this approach even if you fall under the age of 40, demonstrating that there might still be money to gain. The scheme he highlights is based upon the concept of 'buying back' National Insurance years.

The size of your state pension upon retirement relies on the number of full 'qualifying' national insurance (NI) years you've accumulated. Clarifying further, Martin stated: "Most collect NI years through working and paying NI, but you can also get them if you're claiming benefits or caring for others (if you're not sure what this is about, see how the new state pension works ).

"In general, you need around 35 full NI years to get the maximum state pension, though some will need a lot more (we've seen examples of people needing 44+ years) depending on your age and NI record up to now."

"Normally you can buy back up to six years, but when the 'new' state pension was introduced, transitional arrangements were put in place to let you plug gaps all the way back to 2006. This was due to end on 5 April 2023, and then 31 July 2023, but because so many people were trying, the necessary government phone lines got clogged up (mainly due to Martin shouting from the rooftops about it). So the date has been extended to 5 April 2025."

One of Martin Lewis's followers shared their success story after heeding his advice, saying they managed to boost their pension by £49 a week. Martin commented: "To put that in context, Martine paid up to £5,000 (it may've been far less) to increase her state pension by £2,550 a year. If she lives for the typical 20 years after state pension age, that'd be a total uplift of around £51,000... and it's inflation-proofed."

Martin has broken down the process into steps:.

Step 1: Watch Martin's NI record explainer

Martin advises watching his explanation of how the system operates on Youtube here or listening to him on his BBC podcast.

Step 2: Check whether you're missing any NI years

He suggests first checking your national insurance record for any gaps - it will indicate 'full year' or 'year is not full'. If there are gaps, use the Government's State pension forecast calculator to see if your pension could be increased from what it might currently be.

Step 3: Check if you can fill the gap for free with NI credits

If you've been caring for a child, on sick pay, unemployed and seeking work or in various other situations, you could be eligible for free NI top-ups. You can find information on how to apply for any NI credits manually on the Government's national insurance credits page.

Step 4: Determine whether you should pay

For those at or nearing pension age, it might be relatively straightforward to pay to fill the gaps. Those closer to 40 may naturally fill the gaps over the rest of their working life - but could also choose to pay to fill them.

For those under 40, it probably won't make sense.

Martin advised: "Call the Department for Work and Pensions' helplines to understand if paying to plug any NI record gaps will actually result in you being paid more state pension."

A spokesperson for HMRC said: "Most people no longer have to phone DWP or HMRC to see how filling gaps would change their State Pension as there is now an easy and simple online service which allows them to check to see if they have any gaps they can fill in their NI record, what filling those gaps would cost and how much more they would receive in State Pension - and if they decide to fill any gaps they can pay online there and then."

Customers can access the Check your State Pension forecast via GOV. UK or through the HMRC app.

Step 5: Use the MSE calculator

You can use the MSE calculator here to check whether it is worth buying NI years.

Step 6: Don't pay until you're confident

The Government has launched a new online service that will display for some individuals how much their state pension could potentially increase by and the number of National Insurance years required to achieve this.

This service allows you to pay for these missing years securely online, but it's advised to only proceed if you're confident it's the right decision.

- If you haven't reached state pension age yet, get in touch with the Future Pension Centre on 0800 731 0175.

- If you've already reached state pension age, contact the Pension Service on 0800 731 0469.

Step 7: Not everyone will benefit

The Government's online service, along with the Future Pension Centre or the Pension Service, can inform you if paying for extra National Insurance (NI) years will boost your state pension entitlement. However, it's important to consider the broader context (the Government helplines won't assist with this).

Consider:

• If you're likely to have a low income and will only rely on state pension, pension credit may cover the gap
  
  

• The gains from buying extra years may be reduced if it pushes you into a higher tax bracket

Step 8: Payment method

If you've consulted with the Future Pension Centre or the Pension Service and wish to purchase additional NI years online, access the service via the 'Check your State Pension forecast' page on Gov.uk. It's also accessible through the HMRC app.

If you've spoken to the Future Pension Centre or the Pension Service, but are unable or unwilling to use the online service to top-up, decide how many NI years to buy, contact HMRC to obtain an 18-digit reference number here, then send the payment to HMRC. The payment may take up to 60 working days to process, after which your NI record should be updated.