Memory has three stages: encoding, storage, retrieval. Almost all “memory problems” reported by healthy adults are in fact encoding problems — the information was never recorded, because attention was elsewhere at the time.
Anxiety and depression consume working-memory capacity. Working memory is limited — five to seven items — and part of it is already taken up by worry, by replaying a conversation, or by monitoring your own sensations. What remains for what is actually happening around you is less, and the name of the person just introduced never gets stored at all.
Sleep is the second major factor. Memory consolidation happens during sleep, particularly in the deep stages. A few weeks of fragmented sleep produce a picture that looks very much like a cognitive problem and that clears completely once sleep returns.
The third is the worry loop: after a few episodes, fear of dementia appears, fear raises anxiety, anxiety consumes still more working memory, and the lapses multiply. Here self-monitoring worsens exactly what it measures.