Families, students and campaigners from all over the country descended on London for the march, which began in the heart of the financial district and snaked its way to Parliament.
Led by a brass band trio, they waved placards, blew whistles and chanted their opposition to the Conservative Government and its plans for billions of pounds of cuts.
Organisers said an estimated 250,000 people were on the march.
Among them were comedian Russell Brand and singer Charlotte Church, who brandished an End Austerity Now placard.
She said: “I’m here today in a show of solidarity with everyone here - it is a massive turnout - everybody who thinks that austerity isn’t the only way and thinks it is essentially unethical, unfair and unnecessary.”
Asked if she was inspired by the surge of the Scottish National Party she said “absolutely”.
The 29-year-old added: “But I think that the Scottish have been able to galvanise themselves against the Westminster elite.
“We are in one of the richest nations in the world and social inequality is unacceptable.
“I’m immensely proud to be here. I think this is a brilliant movement and it is for the common good. We are here to make a stand.”
Speakers including Labour London Mayoral hopeful Diane Abbott addressed the crowds before they set off for the Palace of Westminster.
Organisers promised a “festival atmosphere” and the march kicked off to the sounds of drum bands.
But a loud boo erupted through the crowd as it arrived outside Downing Street and a red flare was set off, filling part of Whitehall with thick scarlet smoke.
Protesters, some clad in goggles and with scarves wrapped around their face to conceal their identity, chanted their opposition to Prime Minister David Cameron.
Another demonstrator waved a model of Margaret Thatcher’s head on a stick.
Many trade unionists and public sector workers were among the crowd.
The march did receive some criticism on social media.
Tory councillor in Westminster Richard Holloway stirred up controversy when he tweeted: “Go ahead & wave your banners. The grown ups will get on with running the country”.
Meanwhile, hundreds of protesters braved the rain to march against austerity through the streets of central Liverpool.
Activists walked behind a large banner which read “£NOUGH IS £NOUGH” and chanted “They say cut back, we say fight back”.
They stopped to boo McDonald’s and HSBC in what was described as a “standing protest” against the fast food chain and banking giant.
Organisers were hoping for up to 600 people to take part but the figure was closer to 250 to 300, according to reports.