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Personalised care budgets

If you need help with day-to-day tasks at home, your local council may be able to help you pay for care. If you're eligible for help, your council will provide you with a personal budget to pay for this support. You can manage this money in ways that suit you.

What is a personal budget?

A personal budget is provided by the council if they decide you are eligible for help following your care needs assessment and financial assessment. It gives you an amount of money to spend based on how much it will cost in your local area to arrange the care and support you need.

If you're assessed by your council as being eligible for help, you'll be given a personal budget to make sure your needs are met.

How are personal budgets calculated?

The amount of money in your personal budget is worked out by the local council based on:

  • your care needs assessment.
  • a financial assessment known as a means-test, which looks at your income, savings and other capital assets.
  • how it will cost to meet your eligible needs.

Your personal budget amount can be changed in future if your needs change.

How do I use my personal budget?

It’s up to you how you want to use your personal budget to meet your eligible needs. It can be used in one of three ways:

  • your local council can manage an account.
  • a third party can manage an account.
  • you can manage a direct payment.

Management by your local council

The local council manages your personal budget for you. They will be responsible for arranging care and support for you, but this must be based on your wishes and as agreed in your care plan. This is the most commonly chosen option.

Management by a third party

A third party organisation, such as a care provider, will arrange payments for services you're receiving. The third party may charge you for this service.

Direct payments

Cash payments are paid directly into a bank account specifically set up to receive the personal budget (not your usual savings account). You can choose how to spend this money to meet the needs set down in your agreed care plan, which maximises your choice and independence. It can’t be used to pay for day-to-day costs such as food or utility bills.

You must request direct payments if you want to receive them. The local council then decides whether to agree.

Even though you have control over your direct payments, the local council should still help you arrange and manage your care, and regularly check that your needs are still being met. They should provide appropriate support, information, and advice. They may also ask you to keep all receipts as proof of spending.

You can be creative with how you spend your direct payments, for example:

  • employ your own care workers
  • buy services from a voluntary or private agency
  • buy equipment or pay for home adaptations
  • purchase other types of support to meet your assessed needs
  • pay for someone to help you get to a café to meet your friends, a place of worship, to the shops, or other places that are important to you.

Direct payments are a good way to be creative and flexible when managing your care but they can involve more work for you to arrange the care.


If you're employing someone directly to help you, you'll need to deal with tax, National Insurance and pension issues for them. You should also arrange insurance and a DBS check.

What if I’m not eligible for a personal budget?

If your local council's social services decide that you're not eligible for social care services and a personal budget, they should still help you decide how to arrange the help you need.

You can request a reassessment at a later date, or you could challenge the decision through the complaints procedure. Talk to social services about a reassessment or to request a complaints form.

Can someone else manage my personal budget for me?

A 'suitable person' — usually a family member or a friend — can manage a personal budget in the form of a direct payment under certain circumstances.

When someone lacks mental capacity

Direct payments are available to those who lack mental capacity as long as they have someone to manage them on their behalf. This person may have power of attorney or deputyship. Otherwise, the local council must be satisfied that you are a suitable person who will manage the money in the person's best interests.

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We offer support through our free advice line on 0800 678 1602. Lines are open 8am-7pm, 365 days a year. We also have specialist advisers at over 140 local Age UKs.

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Last updated: Jul 17 2020

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