Nearly 4,000 members of the Armed Forces Pension Schemes breached their annual tax-free pensions savings limit in 2017/2018, a freedom of information (FOI) request has revealed.
The data, supplied to Quilter by the Ministry of Defence, revealed 3,840 members of the schemes breached the allowance, four times more than in 2015/2016 when 1,010 members were in breach.
The armed forces is the next public sector service to be hit by the tapered annual allowance issue introduced by former chancellor George Osborne in the 2014 budget, along with the judiciary and the NHS.
It adds to growing concern over the government's pension annual allowance taper which has already created resource strain in services including the NHS, where senior staff are facing huge tax bills due to the policy.
The annual allowance was reduced to £40,000 in 2014, and, since its introduction in 2016, the additional taper for high earners - which sees savers lose £1 from the annual allowance for every £2 of remuneration over £150,000 - brings the allowance down even further.
Quilter financial planner David Gibb said the pension tax rules have now "spiralled into a staffing crisis" across public sector employers.
He added: "It has led to a situation where key public services professionals are put in a position where they prefer to decline overtime, reduce their hours or consider early retirement.
"This is all down to the unintended consequences of a poorly thought-through tax reform designed to reduce government expenditure on pension tax relief for higher earners.
"What policymakers failed to recognise was the disastrous knock-on effect this would have on public sector pension schemes in particular, where the nature of pension entitlement calculations means that employees can face punitive tax bills running into the thousands."
The annual allowance has caused significant problems in the NHS, creating longer waiting lists due to senior doctors working fewer hours to avoid additional tax charges.
Additionally, a response to a previous FOI request supplied to Quilter revealed around a quarter of judges breached the annual allowance on pension contributions in 2017/2018.
Gibb urged the Treasury to "scrap the taper altogether as a matter of urgency".
This comes after the government put forward proposals to review pensions tax relief rules in order to give senior staff affected by the rules full flexibility over the amount that they contribute to their pensions.
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