This study investigates the subjective well-being of immigrants and natives in the United Kingdom (UK) during the Covid-19 pandemic. A novel aspect of this research is that we exploit the quasi-experimental nature of the pandemic to analyse the potential causal impact of neighbourhood embeddedness in mitigating the adverse shock on subjective well-being. We proxy subjective well-being by life satisfaction and consider neighbourly support and psychological sense of community as indicators of neighbourhood embeddedness. The findings show that the pandemic negatively impacted the life satisfaction of immigrants more than that of natives. The analysis demonstrates that high neighbourhood embeddedness had a significant protective impact on the well-being of immigrants, whereas the opposite was observed for natives. Further analysis reveals that the adverse impact for natives can be attributed to their tendency to comply with Covid-19 social distancing rules, while the results for immigrants remain qualitatively consistent irrespective of their compliance or non-compliance behaviour. The overall findings in this research imply that community-based interventions should be aimed at balancing the promotion of social networking with adherence to health guidelines in a way that minimises well-being trade-offs during a health crisis.