Personal budgets

Find out what a personal budget is, who can receive one, how a personal budget can be used and how it is managed (including the direct payments option).

What are personal budgets?

A personal budget is money that a local authority allocates to a person who needs care and support. These needs must be assessed by the local authority to see whether the person is eligible for support. Some people with dementia may be eligible. The money can be spent in many ways to meet the person's needs. 

Personal budgets are used in England. In Wales and Northern Ireland there are different systems in place. However, while most of the information applies to England only, the information on direct payments (a means of receiving an allocation of money) is relevant not only in England, but also in Wales.


Personal budgets help people to make choices about their care. They are part of a government agenda in care called 'personalisation' (in England). Personalisation aims to give individuals independence, choice and control over the support they use, putting them at the centre of their own care.

A crucial part of giving people control is providing information, advice and advocacy, so that people are able to make informed choices. This is particularly important for people with dementia, who may need additional support to make decisions.

What size is a personal budget? 

The size of a personal budget depends on a number of factors. These include the type of care required to meet the assessed needs and the result of any financial assessment. Depending on income and savings, the person may have to make some contribution to their care costs, but any health services (such as home visits by a community nurse or occupational therapist) are still free.

If there are a number of ways to meet an assessed need, the local authority may agree to fund only the less expensive option. For example, if someone needs a walk-in shower and they request a luxury model, the local authority is likely to agree only to a payment for a cheaper model that meets the need. If the person insists that they want the expensive option, they may be able to 'top up' the payment themselves to meet the extra cost.

If the personal budget is to be paid as a direct payment, any cost of getting independent advocacy or advice and support should also be included in the support plan and the personal budget allocation.

If the plan involves paid carers who need training to carry out their role (eg lifting and handling), the costs of training must also become part of the personal budget allocation.

Different rates may apply depending on whether the person buys support from a support agency or another type of service.

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