Thousands of Lifetime ISA bonus payments delayed ahead of stamp duty deadline after HMRC technical error
Thousands of Lifetime ISA savers have had their 25% bonus payments delayed by over a week after a HMRC "technical error". It means some first-time buyers looking to purchase a home before the stamp duty holiday ends this month could be left as much as £1,000 out of pocket, MoneySavingExpert.com can reveal.
With a Lifetime ISA (LISA), you can save up to £4,000 a year towards your first home or retirement and it gives you a 25% cash bonus of up to £1,000 a year on top. Bonuses are calculated and paid if and when a saver makes a monthly contribution, meaning if someone deposited the maximum £4,000 allowance between the start of the new tax year on 6 April and 5 May, they'd be due their £1,000 bonus by the end of May.
But HMRC has admitted a technical issue meant it didn't process both cash and stocks and shares Lifetime ISA (LISA) bonus payments during this period, so these didn't land in accounts by the end of May as expected. It says the issue has since been fixed and all missing bonuses have now been paid to LISA providers, although affected savers are only just starting to receive this money now and we've also heard from one LISA provider, which claims it's still not received missing bonuses yet.
For more info on how LISAs work, as well as our current top picks, see our Lifetime ISAs guide.
'Thousands' of LISA savers may be impacted
HMRC told us that technically all LISA providers could be impacted by the error, although in reality only those with bonuses that were due to be processed by the end of May will be hit, as such as it believes only a "small number" of savers will have been affected.
When MoneySavingExpert.com asked both current and former LISA best buy providers AJ Bell, Hargreaves Lansdown, Nottingham Building Society, Nutmeg, Paragon, and Skipton Building Society they all told us they'd not been impacted by the problems.
However, Moneybox - one of our current top pick cash and stocks and shares LISA providers - has confirmed the majority of its cash savers who deposited money between 6 April and 5 May will have been affected. The provider has hundreds of thousands of cash LISA customers in total, although it says only "thousands" of these savers will have potentially been impacted.
The delay comes at a bad time for first-time buyers in England, Northern Ireland, and Wales who may be rushing to complete property purchases before temporary measures, brought in last July to help boost homebuying during the pandemic, come to an end on 30 June. See our Stamp Duty guide for full details on how the holiday works and what happens from 1 July.
If your bonus is missing - contact your LISA provider
If your payment is missing, you need to contact your LISA provider. Moneybox, for example, told us at the time of publication that it's still waiting for the cash from HMRC to arrive. However, it adds that it's contacted all affected customers and has offered to pay bonuses from its own funds on a case-by-case basis if they're needed for urgent house purchases.
HMRC told us that the technical error only delayed the payment by two day, and they made all LISA providers aware they would need to resubmit all claims for customer bonuses by 19 May.
So if Moneybox, or any affected LISA provider, did not submit the claim before 19 May, then your bonus will be paid at the end of June.
Moneybox asked anyone with concerns to contact it via its in-app chat (go to 'Settings' then select 'Help') or by emailing firstname.lastname@example.org.
Those in the process of completing their house purchase should notify their conveyancer of how much they wish to withdraw from their LISA - and explain that there may be a delay while they wait for the missing bonus to be added.
HMRC says it will pay interest of 2.6% on top of delayed bonuses for the period between when the payment was due to be paid and when it was actually deposited.
What does HMRC say?