Low education has an impact on life expectancy and level of cognition, but little is known on its effect on life expectancy with cognitive impairment. The Medical Research Council Cognitive Function and Ageing Study (MRC CFAS) collected population-based longitudinal data on people aged 65 years and older including measures of education and cognitive impairment, using the Mini-Mental State Examination (MMSE), for five geographically diverse areas around England and Wales interviewed between 1991 and 2003. Transitions between health states were calculated using Markov chain methods. Life expectancy in different states of cognitive function as measured by MMSE were further explored for different education groups. The effect of fixed and educationally based cut points for cognitive impairment are investigated. Life expectancy spent with cognitive impairment is fairly constant with increasing age at around 1.4 years in men and 2.5 years in women, though this reflects a large increase in the proportion of life spent with cognitive impairment. The differences seen between education groups for the proportion of total life with cognitive impairment (men 13% and women 22% of life lived for low education vs men 7% and women 12% in high education group) disappear when education-adjusted cut points are used (10% in men and 17% in women at age 65 for all education groups). The results show that there is a substantial amount of life expectancy with cognitive impairment in both men and women. The impairment burden is just as great for those with high education as the lowest educated group.