I spent a long time getting this working myself so thought it best to save the steps somewhere. Be sure to follow every step exactly.

1) Run the following terminal commands.

sudo add-apt-repository ppa:nm-l2tp/network-manager-l2tp
sudo apt-get update 
sudo apt-get install network-manager-l2tp
sudo apt-get install network-manager-l2tp-gnome

2) Now Reboot your computer.

3) Open Network settings, click “+” to add a VPN connection of type “Layer 2 Tunneling Protocol (L2TP)”.

4) Enter a name for it.

5) Enter the hostname into the “Gateway” field.

6) Enter your username and password (click the <?> icon next to it first and select an option)

7) Click “IPSec Settings” and enter them as in the screenshot below.

8) Save/close the settings window(s).

9) Enter the following terminal commands:

sudo service xl2tpd stop
sudo systemctl disable xl2tpd

10) Re-open the Network settings and attempt to connect to your newly created VPN, it should now work. If it doesn’t check out tail -f /var/log/*.log for information on what could be wrong.