Social networks have been associated with a wide variety of health outcomes in older people. We examined the dimensions underlying the Wenger social support network type assessment to identify dimensions associated with mental and physical health. We interviewed 1334 community-dwelling participants aged 65+. The Geriatric Mental State automated geriatric examination for computer-assisted taxonomy interview was used to rate psychiatric symptoms and quality of life. Cognitive impairment was defined as a score of <24 on the mini mental state examination. Clustering around latent variables identified two uncorrelated social support network domains: family (distance from and contact with relatives) and social engagement. Social engagement was associated with a lower age- and sex-adjusted prevalence of depression (odds ratio for a one-tertile increase 0.48), generalised anxiety disorder (OR 0.60), cognitive impairment (OR 0.68) and physical disability (OR 0.62) all p < 0.001. Adjusted for age, sex, depression, cognitive impairment and disability, the social engagement domain was also associated with better quality of life (OR 1.5) self-rated happiness (OR 1.3) and rating life as worth living (OR 1.4). The family domain, on the other hand, was not significantly associated with any health outcome. The results suggest that elective relationships and social engagement are the 'active ingredients' of social networks which promote health in later life.