Mental illness costs over £77bn a year when the costs of care, lost work and poor quality of life are combined, experts have revealed.
The report looked at mentally ill people's quality of life
The figure is twice as high as previous estimates - and is higher than the total spent on the NHS in England last year.
The Sainsbury Centre for Mental Health looked at the cost of mental illness in England.
Its estimate is high because it takes into account 'hidden' costs linked to quality of life not normally calculated.
Care for the mentally ill cost £12.5bn, including NHS, local authority and private care, as well as that provided by family and friends.
This is a staggering cost to the British taxpayer
Paul Marsden, Liberal Democrat health spokesman
The NHS alone spent £6.5bn on mental health services last year.
The cost to the economy of people not being able to work because of their illness was put at £23.1bn by the centre's report.
Around 39% of adults with a mental health problem do not have a job, which in itself represents a loss of £9.4bn.
The final £41.8bn chunk of the £77.4bn bill was made up of the 'hidden' costs, say the report's authors.
These can include a poor quality of life and even loss of life.
Much of the care given to mentally ill people comes from unpaid relatives and friends.
The report estimates the cost of this care, if provided by organisations, would be around £3.9bn.
But carers are often also unable to take up job opportunities - another 'hidden' cost.
Matt Muijen, chief executive of the Sainsbury Centre for Mental Health, said: "Mental health problems place a major burden on individuals and society.
"Yet much of this burden is avoidable.
"Discrimination and stigma, not an inability to work, are often the causes of worklessness for those with mental health problems.
"And promoting good mental health remains a low priority in public services."
He called for more effective prevention, treatment, care and support for the mentally ill.
A spokeswoman for the charity MIND, said: "This doesn't come as a surprise to us. People with mental illness are experiencing a reduced quality of life."
Marjorie Wallace, chief executive of the mental health charity Sane, said: "The true cost of mental illness has been hidden and the money pledged so dissipated that taxpayers should seek redress.
"Carers of the mentally ill must be recognised and medications that can dramatically improve the lives of people with mental illness must be made available quickly."
A Department of Health spokesman said: "Modernising mental health services is a priority for this government, and reforms are being made in all areas."
He added: "The aim is to support people with mental health problems in their own community and improve the quality of their lives."
Paul Marsden, Liberal Democrat health spokesman, said: "This is a staggering cost to the British taxpayer.
"The government has failed to live up to its rhetoric in providing first class care for those with mental health problems.
"We need more quality care in the community and more money for proven drugs."
He added: "Mental health is still treated as a second class service despite the extraordinary impact it has on lives, families, business and the economy."