Background: Neurocognitive impairments are associated with poor clinical and employment outcomes in individuals with affective disorders. However, little is known about their associations with long-term clinical outcomes such as psychiatric hospitalizations, and with socio-demographic indicators other than employment. In the largest longitudinal study of neurocognition in affective disorders to date, we investigate the role of neurocognitive impairments on psychiatric hospitalizations and socio-demographic conditions. Methods: The study included 518 individuals with bipolar or major depressive disorder. Neurocognitive assessments covered executive function and verbal memory domains. Longitudinal data on psychiatric hospitalization and socio-demographic conditions (employment, cohabitation, and marital status) for up to 11 years were obtained using National population-based registers. The primary and secondary outcomes were psychiatric hospitalizations (n = 398) and worsening of socio-demographic conditions (n = 518), in the follow-up period since study inclusion, respectively. Cox regression models were used to examine the association of neurocognition with future psychiatric hospitalizations and the worsening of socio-demographic conditions. Findings: Clinically significant impairment in verbal memory (z-score ≤ −1; defined by the ISBD Cognition Task Force), but not in executive function, was associated with a higher risk of future hospitalization, when adjusted for age, sex, hospitalization in the year preceding inclusion, depression severity, diagnosis, and type of clinical trial (HR = 1.84, 95% CI:1.05–3.25, p = 0.034; n = 398). The results remained significant even after accounting for illness duration. Neurocognitive impairments were not associated with the worsening of socio-demographic conditions (p ≥ 0.17; n = 518). Interpretation: Promoting neurocognitive function, especially verbal memory, may mitigate the risk of future psychiatric hospitalization in individuals with affective disorders. Funding: Lundbeckfonden (R279-2018-1145).