In order to make savings, UK soldiers posted in Iraq could lose their special daily allowance of £29 (US$35), under new plans being considered by senior British defense figures.
In a move likely to spark fury among front-line British army personnel, currently supporting Iraqi forces in the battle against Daesh, military chiefs recognize, however, that it could save £6 million (US$7.9 million) annually from their already hard-pressed budget.
The operational tax-free allowance is paid every day while the soldiers are away from home, having been first introduced in 2006 by the then-British prime minister Tony Blair to those fighting wars in both Afghanistan and Iraq.
The figure was later doubled to £29.02 (US$39) a day by the former Conservative prime minister David Cameron, even though British involvement in both countries has now become more of a training exercise that a front-line fighting role.
It is this reduction in the danger level that has prompted questions over whether it should now be scrapped.
The UK Ministry of Defence (MoD) has insisted that the topic is not up for discussion.
"There has been no change to the operational allowance policy and those deploying to Iraq will continue to receive it," an MoD spokesperson said.
Whitehall sources also insist, however, the proposal is being actively examined despite the fact it would be unpopular and leave the troops totally demoralized.
Many soldiers see the allowance as a welcome perk, especially at a time when wages have been capped at just one percent.
"It will have a huge effect on morale, but we are so short of money. It is all about money," said one former army officer.
The daily allowance is also paid in addition to another tax-free lump sum given to military personnel sent away from home on duty in Iraq and Afghanistan, regardless of any risk or danger involved.
Members of Parliament are expected to focus on Armed Forces pay when it comes up for discussion in the House of Commons on Wednesday, November 1.