Families of residents at Westwards House, Croston Road, Garstang have been advised that the home will close on December 15.
The home was last inpected in July 2019 when it was rated as good for being safe, effective, caring, responsive and well led.
Home owner and manager Mrs Anne Sutton, director of BLHC Westwards House Ltd, told the Post: "It's inappropriate for me to comment other than to say the priority has to be the safe relocation of residents."
Lancashire County Council is assisting with that relocation. Ian Crabtree, director of adult disability and care services for Lancashire County Council, said: "We're working closely with the proprietor at Westwards House, and residents and their families following the provider's decision to close the home. We've spoken with the residents and families who are affected by the closure and each resident has been allocated a social care worker to support them through the process during the coming weeks.
"Suitable, alternative accommodation is being found for each person as quickly as possible. We will continue to support residents and their families once they've moved to ensure their needs are continuing to be met in their new home."
At the time of the 2019 inspection by the Care Quality Commission the home was caring for 16 people over 65. Inspectors noted: " There were enough staff to support people."
Its report concluded: "The staff were skilled and competent to provide people's care ... The staff gave people choices about their lives and care and respected the decisions people made. People's rights were protected..... The staff treated people in a kind and caring way... People enjoyed spending time with and laughing and joking with the staff... People told us this was a good service and said it was a good place to live."
That judgement is echoed by local resident Carole Beddows of Catterall whose ex mother-in-law Beatrice (Bet) Larkman has been cared for at Westwards House since July 2018. She said: "I can't fault the care home. It's absolutely brilliant. It is very well run. She is very happy there. They've kept her happy. It's just really upsetting that at this age at 90 she's going to have to move."
Carole warned that the closure would be "the tip of an iceberg." as more homes struggle to get staff." and said that care homes were treated "like a poor relation."
She said: "I think this is the first one and I think it's going to be an avalance."
She questioned why the Government has not added care staff to the list of vital workers who can come into the U.K. and why this was not being given priority alongside the recognised need for more HGV drivers. She predicted that by the end of six months those in need of care would be having to stay in hospital beds "because people realise there's nowhere to go."
She said she had been advised by the designated social worker that they would look for a place at a home within a 10 mile radius. But she said she feared the impact it would have on Bet, who has advanced dementia.
Carole visits Bet now but warned that if she does have to be moved a long distance away she will not be able to afford to visit so regularly. She said: "I'm retired as well. I'm not going to be able to afford acres of money on petrol."
She said: " I have actually contacted my MP Ben Wallace - I still don't understand why dementia is not counted as an illness within the NHS."
Carole also pointed out that it was not clear whether Bet, who has to self fund her care from her pension and a deferred future charge on her flat in Essex, would face increased charges.
She said: "As she has advanced dementia this move will be very unsettling for her as she will have no clue why she is moving. Perhaps the Government could explain what is going to happen to people like my daughter’s grandmother. This is no way to treat a lady who worked all her life but still has to fund her care from her savings and property - so much for care reforms.
"All this saying they'll not have to sell their home again - it's just ridiculous. I've never contacted my MP before but I feel strongly about this and in another 10 years it could be affecting me."