Subjective memory complaints (SMC) are a criterion in many definitions of mild cognitive impairment (MCI). However, there is controversy over whether this is useful and appropriate, as previous research has suggested that SMC may be a function of mood problems such as anxiety and depression. This paper aimed to establish the relationship between MCI and mood in older people and to investigate the role that SMC play in the relationship. Structured interviews were conducted with community dwelling older people in Wales to collect information regarding cognitive functioning, mood, and well-being. A widely-used algorithm was used to categorize 3,173 participants into three groups: not cognitively impaired, MCI including SMC (MCI), and MCI without SMC (MCIW). The odds of experiencing anxiety or depression were calculated for each cognitive group. Participants with MCI had increased odds of experiencing symptoms of both anxiety and depression, but the odds were not changed for participants in the not cognitively impaired or MCIW categories. A mediation analysis was performed on the whole sample using cognition as a dichotomous variable, grouped using an age-, education-, and gender-adjusted median cut off point. This showed that SMC partially mediated the relationship between anxiety and cognition, and depression and cognition. Mood problems may be related to SMC rather than objective cognitive impairment, as only participants with MCI that included SMC showed increased odds of experiencing anxiety and depression. SMC are likely to play a mediating role in the relationship between mood and cognitive functioning.