Depression in old age is a major public health problem though its relationship to onset of disability and death is not well understood. We aim to quantify the impact of late-life self-reported depression and emotional problems on both the length and quality of remaining life. Longitudinal analysis of 11,022 individuals from the MRC Cognitive Function and Ageing Study (MRC CFAS), multi-centre longitudinal study on ageing in individuals age 65 years and older living in England and Wales. Individuals have been followed at intermittent time intervals over 10 years. Subjects reporting at baseline that they had consulted about emotional problems for the first time since the age of 60 years were considered, along with a subgroup where a GP suggested depression. Disability was defined as an IADL or ADL disability that required help at least once a week. Total and Disability-Free Life Expectancy (TLE and DFLE) were calculated using multi-state models, separately by gender, and with presence of emotional problems/depression and multimorbidity as covariates. Emotional problems had a greater impact on DFLE than TLE, reducing DFLE by 1.8 years, but TLE by only 0.5 years at age 65 with the effect increasing with age. The effect was most marked in older people reporting other co-morbidities where emotional problems in addition resulted in a reduction of 0.9 years in total and 2.6 years disability-free. Although emotional problems were only self-reported, these results highlight the burden of late-life depression on the quality of remaining years of life.