Three warnings have been issued around the failure to meet the LISA transfer deadline.

According to Hargreaves Lansdown, the first warning issued is that savers can only transfer £4,000 from their help to buy (H2B) ISA to their LISA in 2018/19, resulting in a maximum bonus of just £1,000 if they miss the transfer deadline of 5 April 2018.

Additionally, transferring the £4,000 after the deadline will use savers entire allowance for 2018/19, meaning that they won’t be able to make any contributions until 6 April 2019.

Finally, by 5 April 2017 the maximum savers could have had in their H2B ISA is approximately £4,400 but the maximum transferable in any future year is £4,000. This would result in savers having to transfer the additional £400 in the following tax year, eating in to your 2019/20 balance.

Hargreaves Lansdown personal finance analyst, Sarah Coles commented: “Not only does this mean turning down free money from the government, it also means that instead of ending 2018/19 with up to around £12,400 in your LISA (and a bonus of £3,100), you’ll have a maximum of around £4,000 and a bonus of £1,000. Take advantage of the cold snap, stay in and complete your transfer forms before it’s too late.”
The firm has also highlighted rules for transfers in the current tax year, which could improve your bonus by up to £1,100.

Under these rules, savers can transfer everything that was in their H2B ISA on the day before the LISA was launched, which was 5 April 2017, without affecting their annual contribution allowance. The most savers could have contributed up to this point is £4,400.

Savers are then able to transfer everything contributed after April 2017, which is a maximum of £2,000, by 1 February 2018. However, savers can then contribute a further £2,000 within the same tax year and receive a 25% bonus on the entire £8,400.

Coles further commented: “The LISA has a number of advantages over H2B, so a transfer is often in your best interests. If you complete it before midnight on 5 April, special rules for this tax year make it particularly rewarding”.

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