Personal Budgets and Direct Payments: How to Stay in Control of Your Care in the UK

Category Active well-being for seniors

Personal Budgets and Direct Payments: How to Stay in Control of Your Care in the UK

In the UK, more people than ever are choosing to take charge of their own social care. Rather than relying on council-arranged services, individuals can now receive money directly to organise their own support. These options known as personal budgets and direct payments are central to the UK’s modern approach to personalised care.

This guide explains what they are, how they work, who qualifies, and how you can use them to design care that fits your lifestyle and preferences.

What Is a Personal Budget?

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A personal budget is the total amount of money your local authority allocates to meet your care needs after completing a care assessment. It reflects the cost of the support required to help you live independently.

You can choose how your personal budget is managed:

Managed by the council — they arrange care on your behalf.
Managed by a third party or nominee — someone else helps handle your care plan.
Received as a direct payment — you manage the money yourself.

The goal is flexibility. You decide what kind of support works best for you — from hiring a personal assistant to paying for day activities or specialist therapies.

What Are Direct Payments?

Direct payments are when the local authority transfers the personal budget directly into your bank account. This allows you to buy your own care services rather than relying on council arrangements.

For example, you might use direct payments to:

- Hire a private carer or personal assistant.
- Pay for physiotherapy, domestic help, or transport.
- Access community activities that improve well-being.

Direct payments promote autonomy and accountability, but they also come with responsibility — you must manage funds correctly and ensure that services meet agreed standards.

Comparing Personal Budgets and Direct Payments

Aspect	Personal Budget	Direct Payment
Definition	Money allocated by the council to meet your care needs.	The portion of the personal budget you receive to manage yourself.
Who Manages It	Can be managed by the council, a third party, or yourself.	You (or a nominated person) manage the funds directly.
Flexibility	Moderate — depends on how it’s managed.	High — you decide what services to use and when.
Responsibilities	Limited if council-managed; they handle payments and contracts.	You must keep records, pay carers or suppliers, and ensure compliance.
Control Over Services	Some choice, but within council-approved providers.	Full control over who provides your care and how it’s delivered.
Eligibility	Available to anyone assessed as needing care and support.	Same eligibility, but requires capacity to manage funds or have a representative.

Who Can Get Direct Payments?

You can apply for direct payments if:

You’ve had a care needs assessment and qualify for council-funded support.
You can manage the payments yourself or with help from a representative.
You agree to use the money for the intended purpose outlined in your care plan.

Direct payments are available for:

- Older adults.
- Disabled adults and children.
- Carers who need respite or assistance.

How to Apply for a Personal Budget or Direct Payment

Request a care assessment from your local authority.
If you qualify, they’ll calculate your personal budget based on your care needs.
You’ll discuss how you want to manage your budget — through the council, a third party, or direct payments.
A care and support plan will be created to outline how funds should be used.
You’ll receive the money (if opting for direct payments) and can begin arranging your services.

Your local authority will review your plan regularly to ensure funds are used appropriately.

Benefits of Managing Your Own Care

Choice and control over who supports you and when.
Flexibility to tailor services to your needs.
Continuity of care from trusted professionals.
Empowerment to make independent decisions about your well-being.

However, direct payments also require administrative effort — budgeting, record-keeping, and potentially payroll management for employed carers.

FAQ – Personal Budgets and Direct Payments in the UK

Are direct payments available to everyone?

You must first complete a care needs assessment. If eligible for council-funded care, you can usually request direct payments.

Can I employ family members using direct payments?

In some cases, yes, especially if it’s the most practical way to meet your needs. However, rules vary by council.

Do I need to pay tax on direct payments?

No. Direct payments are not taxable income; they must be used solely for care-related expenses.

Can I switch back to council-managed care?

Yes. You can choose to return to a council-managed budget at any time if you no longer wish to handle direct payments.

How often are direct payments reviewed?

Local authorities typically review your care plan and spending records once or twice a year.

Need help finding a care home?

Senior Home Plus offers free personalized guidance to help you find a care facility that suits your health needs, budget, and preferred location in the UK.

Call us at 0203 608 0055 to get expert assistance today.