George Osborne has announced that the state pension to rise by £2.95 a week from next April, leaving pensioners £800 a year better off from Government measures since 2010.
Pensioners will also be offered the opportunity to make voluntary national insurance contributions to boost retirement income.
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Thousands of people have linked hands on Westminster Bridge in a show of solidarity - one week after the terror attack in the capital.
PC Keith Palmer, 48, stabbed by Khalid Masood while on duty in the grounds of the Palace of Westminster last Wednesday.
Engineering firm CH2M won the £170 million contract but have pulled out of phase two of the project over alleged conflicts of interest.