The annual World Happiness Report found no overall global decline in people’s perceptions of their wellbeing in a survey of 156 countries.
However, the UK fell to 18th place in the global list and experienced one of the larger drops in happiness compared to before the pandemic.
Researchers said the measure for “life evaluation” in the UK fell from 7.16 in 2019 to 6.80 in 2020 – a statistically significant change.
There were 26 countries with significant increases and 20 with decreases in life evaluation measures, while 42 countries showed a significantly higher frequency of negative emotions and there were nine where this was significantly less frequently reported.
The report authors said the modest changes to the overall rankings reflect both the global nature of the pandemic and a “widely-shared resilience”.
They wrote: “Given how all lives have been so importantly disrupted, it is remarkable that the averages are so stable.”
Dr Mark Williamson, chief executive of Action for Happiness, said: “This has been a tough year for so many of us and the World Happiness Report shows that the UK has suffered more than most when it comes to happiness.
“Policymakers should take this as an opportunity to centre human happiness and wellbeing as we recover from the pandemic so that we can build back happier.
“The report also shows the importance of trust and community benevolence, which really means kindness and doing things for others. Not only do these things make us happier, but when it comes to Covid, they can save lives.”
Action for Happiness said one of the potential benefits from the pandemic may be the normalisation of conversations about mental health.
A chapter in the report examined the effects of the first six months of the pandemic on trajectories of mental health in the UK.
The authors, researchers from the Institute for Fiscal Studies (IFS), said mental health has been “one of the greatest casualties” of the pandemic.
They found that one general measure of mental health in the UK was 8% lower than predicted in the absence of the pandemic.
This measure has since improved, but remained significantly lower than pre-pandemic levels.
A fifth of the population experienced persistently worse mental health during the first six months of the crisis, the researchers found.
Young women were initially worst affected but recovered relatively quickly, while women aged 65 and over saw more persistent deteriorations.
Middle-aged and older men were the least-affected groups.
Those with large groups of friends before the pandemic, and those who lost work after April 2020, were more likely to have experienced persistent deteriorations in their mental health.
People in strong romantic relationships fared better, “highlighting the importance of the nuclear family at a time when social circles have shrunk outside of the household”.
Xiaowei Xu, a senior research economist at the IFS and an author of the paper, said: “Women and young people are most likely to have suffered persistently bad deteriorations.
“Policymakers should target support at these groups as we come out of the pandemic and start to rebuild.”
Separate research published in the report found that UK workers who lost their jobs or were furloughed and were already lonely became 43% less happy than those who did not already experience loneliness.
The wellbeing of lonely workers was slower to return to normal once they returned to work, according to researchers from the Said Business School at Oxford University.