Objectives To determine whether hearing loss is associated with incident physician‐diagnosed dementia in a representative sample. Design Retrospective cohort study. Setting English Longitudinal Study of Ageing. Participants Adults aged 50 and older. Measurements Cross‐sectional associations between self‐reported (n = 7,865) and objective hearing measures (n = 6,902) and dementia were examined using multinomial‐logistic regression. The longitudinal association between self‐reported hearing at Wave 2 (2004/05) and cumulative physician‐diagnosed dementia up to Wave 7 (2014/15) was modelled using Cox proportional hazards regression. Results After adjustment for potential confounders, in cross‐sectional analysis, participants who had self‐reported or objective moderate and poor hearing were more likely to have a dementia diagnosis than those with normal hearing (self‐reported: odds ratio OR = 1.6, 95% CI = 1.1–2.4 moderate hearing; OR = 2.6, 95% CI = 1.7–3.9 poor hearing, objective: OR = 1.6, 95% CI = 1.0–2.8 moderate hearing; OR = 4.4, 95% CI = 1.9–9.9 poor hearing). Longitudinally, the hazard of developing dementia was 1.4 (95% CI = 1.0–1.9) times as high in individuals who reported moderate hearing and 1.6 (95% CI = 1.1–2.0) times as high in those who reported poor hearing. Conclusion Older adults with hearing loss are at greater risk of dementia than those with normal hearing. These findings are consistent with the rationale that correction of hearing loss could help delay the onset of dementia, or that hearing loss itself could serve as a risk indicator for cognitive decline.