What is a personal budget?
Your personal budget is the amount of money the council will pay towards any social care and support you need.
The amount of money in your personal budget is decided by your local council after a needs assessment to work out:
- what kind of care and support you need
- how much it will cost
- how much you're able to afford yourself
Carers and personal budgets
If you're a carer, you may be entitled to receive a personal budget after having a carer's assessment to see what might help make your life easier.
A carer's assessment is free and anyone over 18 can ask for one.
Choosing how to receive your personal budget
You can ask the council to either:
- manage your personal budget for you
- pay the money to another organisation - such as a care provider
- pay the money directly to you or someone you choose - this is known as a direct payment
You can also choose a combination of these options. For example, the council could arrange some of your care but send you the rest of the money. This is often called a mixed package or "mix and match".
If the council manages your money
The money in your personal budget will be spent for you by the council. They will arrange all your care and support based on your agreed care plan.
They still need to check you're happy with the care they're arranging for you.
If your money is paid to another organisation
The organisation you choose, such as your care provider, will speak to the council and arrange the payments.
Sometimes other organisations charge you extra money to arrange payments from the council.
The benefits of direct payments
Direct payments give you more flexibility over how your care and support is arranged and provided.
For example, you could choose to hire care workers or personal assistants who:
- are always the same people and available when you need them
- speak the same language as you
- have experience working with your care needs
- are a specific person that has been recommended to you
- can help you get to shops or social events
There are many ways you could choose to use the money. It's your choice as long as you're spending your personal budget on things that meet your agreed care plan.
Most councils will ask for evidence of how you've spent your money every 3 months.
When to consider other options
You may decide direct payments are not helpful if:
- you're worried about managing money or the people you employ
- you spend a lot of time in hospital
- you would rather the council arranged your care
If you're not confident about keeping records or managing the people who care for you, your local council should be able to provide support.
You could also consider having someone else manage your direct payments, for example a friend or family member. You'll need to set up a trust for payments that are managed by someone else.
The Money Advice Service has information about setting up a trust.
How direct payments work
If you choose direct payments, the council will send you the money in your personal budget by either:
- paying it directly into a bank, Post Office, building society or National Savings and Investments account
- sending you a pre-paid card
You can then choose how you spend the money on your own care and support, as long as it matches the care plan you've agreed with the council.
Signing a direct payment agreement
The council might ask you to sign a document called a direct payment agreement. This says:
- how the council want you to record your spending - for example, keeping receipts
- your responsibilities an an employer - if you're paying for a care worker
If you spend direct payments on something that isn't agreed in your care plan, the council could take the money back or end the direct payments.
If you're struggling to manage your money
Ask your local council for advice or call the Money Advice Service on 0800 138 7777.
If you want someone else to receive the direct payment
You could speak to the council and agree for the money to be sent to someone who will spend it for you. For example:
- a carer
- a friend or family member
- someone else who speaks up for you (an advocate)
You may need to write down how they will spend the money and which decisions they can make for you. This is known as a decision-making agreement.
Employing your own carer or personal assistant
If you decide to hire a carer or employing a personal assistant yourself, it's important to know the responsibilities you'll have as an employer.
Although support from the council should be available, you may need to arrange:
- background checks or references
- National Insurance
- pension contributions
Read more about employing someone to work in your home on GOV.UK.
If you don't want to become an employer
You could choose to hire care workers through an agency instead. This removes the legal obligations of being an employer, but could:
- cost you more money
- remove some of the benefits - such as having the same person provide your care
Read more about getting help from a paid carer or personal assistant.
- Age UK have a detailed fact sheet on personal budgets and direct payments in social care
- The Money Advice Service has a guide to direct payments
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This page was last updated on 1 December 2022.