More nurses and midwives are leaving the profession than joining it, new figures show.
Younger staff cited low pay and poor working conditions as reasons for handing their notice in.
Experts say the average nurse is £3,000 worse off than in 2010 and it's "patients who are paying the price".
Between 2016 and 2017, 20% more left the register than joined it, according to the Nursing and Midwifery Council.
The Royal College of Nursing (RCN) and the Royal College of Midwives (RCM) has called on the Government to scrap the pay cap as a matter of urgency to stem the numbers going.
Janet Davies, chief executive of the RCN, said: "Patients are paying the price for the Government's failure to plan for the future and it looks set to get worse.
"With more people leaving than joining, the NHS will be further than ever from filling the 40,000 vacant nurse jobs in England alone.
"The average nurse is £3,000 worse off in real-terms compared to 2010.
"The 1% cap means nursing staff can no longer afford to stay in the profession and scrapping student funding means people can no longer afford to join it."
Jon Skewes, director for policy at the RCM, said pay freezes and increasing workloads had left workers "demoralised and disillusioned".
A Department of Health spokeswoman said: "We are making sure we have the nurses we need to continue delivering world-class patient care - that's why there are almost 13,100 more on our wards since May 2010 and 52,000 in training.
"We also know we need to retain our excellent nurses and earlier this week we launched a national programme to ensure nurses have the support they need to continue their vital work."