Background: The 23-valent pneumococcal polysaccharide vaccine (PPV23) is recommended for UK older adults, but how age moderates effectiveness is unclear. Methods: Three annual cohorts of primary-care patients aged≥65y from the Clinical Practice Research Datalink selected from 2003–5 created a natural experiment (n = 324,804), reflecting the staged introduction of the vaccine. The outcome was symptoms consistent with community-acquired pneumococcal pneumonia (CAP) requiring antibiotics or hospitalisation. We used the prior event rate ratio (PERR) approach to address bias from unmeasured confounders. Results: Vaccinated patients had higher rates of CAP in the year before vaccination than their controls, indicating the potential for confounding bias. After adjustment for confounding using the prior event rate ratio (PERR) method, PPV23 was estimated to be effective against CAP for two years after vaccination in all age sub-groups with hazard ratios (95% confidence intervals) of 0.86 (0.80 to 0.93), 0.74 (0.65 to 0.85) and 0.65 (0.57 to 0.74) in patients aged 65–74, 75–79 and 80+ respectively in the 2005 cohort. Age moderated the effect of vaccination with predicted risk reductions of 8% at 65y and 29% at 80y. Conclusions: PPV23 is moderately effective at reducing CAP among UK patients aged≥65y, in the two years after vaccination. Vaccine effectiveness is maintained, and may increase, in the oldest age groups in step with increasing susceptibility to CAP.