The Royal British Legion and SSAFA Forces Help are in talks over a merger that would pave the way for the creation of one definitive charity for all UK ex-military personnel.
The new charity would probably utilise the red poppy symbol and cultivate public support for ex-service personnel from the recent Gulf conflicts, as well as continuing to provide for veterans from the two World Wars.
The Royal British Legion and SSAFA have worked closely together for years, but a formal merger is now imminent.
"It's fair to say the two charities will ultimately come together," said Stuart Gendall, communications director at the Royal British Legion.
"Quite how this will happen is unclear at the moment, but we both feel that it will work to the benefit of all ex-service personnel."
There are more than 200 ex-service charities in the UK, many of which struggle to raise funds. Several smaller bodies have already merged into the Legion while others, such as the Dunkirk Veterans Association, have asked the legion to help manage their finances.