•Over one-fourth of British have general psychiatric disorders during COVID-19.•Over one-third of British sometimes or often feel lonely during COVID-19.•People with COVID-19 symptoms have more psychiatric disorders and are lonelier.•Women and young people are risky for psychiatric disorders and loneliness.•Employment and living with a partner reduce psychiatric disorders and loneliness. Despite ample research on the prevalence of specific psychiatric disorders during COVID-19, we know little about the broader psychological impact of the pandemic on a wider population. The study investigates the prevalence and predictors of general psychiatric disorders measured by the 12-item General Health Questionnaire (GHQ-12) and frequency of loneliness during COVID-19 in the United Kingdom, a country heavily hit by the pandemic. We analyzed 15,530 respondents of the first large-scale, nationally representative survey of COVID-19 in a developed country, the first wave of Understanding Society COVID-19 Study. Results show that 29.2% of the respondents score 4 or more, the caseness threshold, on the general psychiatric disorder measure, and 35.86% of the respondents sometimes or often feel lonely. Regression analyses show that those who have or had COVID-19-related symptoms are more likely to develop general psychiatric disorders and are lonelier. Women and young people have higher risks of general psychiatric disorders and loneliness, while having a job and living with a partner are protective factors. This study showcases the psychological impact, including general psychiatric disorders and loneliness, of broader members of the society during COVID-19 and the underlying social inequalities.