The prompt and non-prompt production cross-sections for $\psi(2S)$ mesons are measured using 2.1 fb$^{-1}$ of $pp$ collision data at a centre-of-mass energy of 7 TeV recorded by the ATLAS experiment at the LHC. The measurement exploits the $\psi(2S)\to J/\psi(\to\mu^+\mu^-)\pi^+\pi^-$ decay mode, and probes $\psi(2S)$ mesons with transverse momenta in the range $10\leq p_T<100$ GeV and rapidity $|y|<2.0$. The results are compared to other measurements of $\psi(2S)$ production at the LHC and to various theoretical models for prompt and non-prompt quarkonium production.