Functional impairment is central to dementia diagnosis, typically assessed through basic and instrumental activities of daily living (ADLs/IADLs) reported by participants or informants. However, it remains unclear which items and reporting sources best capture cognition-related functional impairment.

We analysed data from 1,050 adults aged ≥65 years in the English Longitudinal Study of Ageing Harmonised Cognitive Assessment Protocol. Self- and informant-reported ADL and IADL impairments were examined at overall and item levels. Associations with general and domain-specific cognition were estimated using linear regression, and with incident dementia over 6.7 years using Cox models, both adjusted for socioeconomic, lifestyle, and health factors.

ADL and IADL impairment proportions were similar across self- and informant-reports, with modest concordance. Informant-reported, but not self-reported, impairments were consistently associated with poorer cognition across domains, particularly executive function (informant-reported ADL: β = –0.71 SD, 95% CI –0.89 to –0.53) and memory (informant-reported IADL: β = –0.46 SD, 95% CI –0.60 to –0.32), and higher dementia risk (ADL: HR = 3.13, 95% CI 1.23 to 7.96; IADL: HR = 5.00, 95% CI 2.40 to 10.43). The strongest associations were observed for managing money and tasks involving episodic or visuospatial memory, especially among individuals with intermediate education and when informants had higher education or daily contact.

Informant-reported IADLs, particularly those involving financial management and memory, may be strong indicators of cognitive impairment and dementia risk. Emphasising these items and informant characteristics may improve population surveillance of dementia and inform outcome selection in preclinical dementia trials targeting early functional decline. These findings should be interpreted in the context of a population-based sample with attrition.