The armed forces cannot be exempt from the public spending cuts, the Ministry of Defence's top civil servant warned, amid claims that almost 80% of soldiers had considered leaving the Army because of financial difficulties.
Ursula Brennan, the permanent under-secretary at the MoD, acknowledged that it was a "tough message" to get across, but insisted that the forces continued to offer good levels of pay and allowances.
Her comments came as the Army Families Federation (AFF) disclosed that a poll it had conducted of between 1,200 and 1,500 troops and their families found that 78% had felt like quitting the service.
The Royal British Legion (RBL) has also accused ministers of backtracking on a commitment to enshrine in law the military covenant which sets out the nation's obligations to its service men and women.
Giving evidence to the Commons Defence Committee, Ms Brennan said that the forces needed to understand the broader economic situation in which the Government was operating.
"The Government's top priority is the resolution of its fiscal problems and reducing the deficit," she said.
"One thing that the armed forces need to do is to recognise that they cannot be exempt from that broader picture. That is a tough message that one needs to get across sometimes. But as a whole we have a programme which still provides for the armed forces challenging and exciting careers with a regime of pay and reward which still offers a good level of pay, a good level of allowances and a good level of pensions."
Earlier AFF chief executive Julie McCarthy said that soldiers were feeling the pressure "from all sides" at a time that they are still fighting hard in Afghanistan.
She warned that unless the Army was able to retain the support of families, many troops would simply leave.
Meanwhile, RBL director Chris Simpkins said that measures in the Armed Forces Bill, requiring the MoD to publish an annual report on the military covenant were not in the same league as inscribing it in legislation as David Cameron had pledged. "The covenant is a concept that we think should be enshrined into law so that the public can hold any Government's feet to the fire about whether it is being properly honoured and respected," he told The Times.