Objectives To determine if providing informal care to a co‐resident with dementia symptoms places an additional risk on the likelihood of poor mental health or mortality compared with co‐resident non‐caregivers. Design A quasi‐experimental design of caregiving and non‐caregiving co‐residents of individuals with dementia symptoms provides a natural comparator for the additive effects of caregiving on top of living with an individual with dementia symptoms. Methods Census records, providing information on household structure, intensity of caregiving, presence of dementia symptoms and self‐reported mental health were linked to mortality records over the following 33 months. Multi‐level regression models were constructed to determine the risk of poor mental health and death in co‐resident caregivers of individuals with dementia symptoms compared with co‐resident non‐caregivers, adjusting for the clustering of individuals within households. Results The cohort consisted of 10 982 co‐residents (55.1% caregivers), with 12.1% of non‐caregivers reporting poor mental health compared with 8.4% of intense caregivers (>20 h of care per week). During follow‐up, the cohort experienced 560 deaths (245 to caregivers). Overall, caregiving co‐residents were at no greater risk of poor mental health but had lower mortality risk than non‐caregiving co‐residents (adjusted odds ratio (ORadj) = 0.93, 95% confidence interval (CI) 0.79, 1.10 and ORadj = 0.67, 95% CI 0.56, 0.81, respectively); this lower mortality risk was also seen amongst the most intensive caregivers (ORadj = 0.65, 95% CI 0.53, 0.79). Conclusion Caregiving poses no additional risk to mental health over and above the risk associated with merely living with someone with dementia and is associated with a lower mortality risk compared with non‐caregiving co‐residents. Copyright © 2016 John Wiley & Sons, Ltd.