The drive was discovered to be missing during an audit
A missing computer hard drive may have contained details of 1.7 million people who had enquired about joining the armed forces, the government has said.
The drive was reported missing last week by EDS, a firm contracted to the Ministry of Defence.
Armed Forces Minister Bob Ainsworth told MPs the information, which went missing at an EDS site in Hampshire, was "unlikely" to have been encrypted.
It is not known if the drive was lost or stolen. An investigation has begun.
In a written statement, Mr Ainsworth said the drive "may, in the worst case, contain details relating to 1.7 million individuals who have enquired about joining the armed forces".
While some who had made "casual enquiries" would only have given a name and contact details, "more extensive personal data" may have been held on those who had applied to join, he said.
"In some cases this will include personal information such as next of kin details, passport and National Insurance numbers, drivers' licence and bank details and National Health Service number," he said.
"EDS assesses that it is unlikely that the device was encrypted because it was stored within a secure site that exceeded the standards necessary for restricted information."
Banks of those who may have had financial details on the disc drive have been informed and the Ministry of Defence police are investigating.
The disc drive was found to be missing during an audit at the site. Mr Ainsworth said a review into MoD data security showed a "crucial need to implement wholesale improvements".
In September it emerged details of up to 500,000 former servicemen and women, held on three portable disc drives at RAF Innsworth in Gloucestershire, had gone missing.
In July the MoD said 658 of its laptops had been stolen over four years and 26 portable memory sticks had been stolen or misplaced since the start of the year.
For the Conservatives, shadow defence secretary Liam Fox said: "This is another symptom of serial incompetence displayed by this government when it comes to data control.
"It seems incomprehensible that we are still learning the details of this
Liberal Democrat defence spokesman Nick Harvey said: "This data loss is an absolute scandal and on a far larger scale than previously feared."
He said the missing information was "a potential goldmine for organised crime and could even compromise national security".
"In the past soldiers have been targeted by extremists. One dreads to think what might happen if this information were to fall into the wrong hands," he added.