Young professionals are leaving the UK in favour of sunnier climates and more favourable tax regimes in Southern Europe, according to Vlad Yatsenko, the billionaire co-founder and chief technology officer of digital banking giant Revolut.
This trend, he warns, poses a significant challenge to Britain’s position as a global talent hub, particularly in the competitive fintech sector.
Yatsenko, who co-founded Revolut in 2015 alongside CEO Nik Storonsky, highlighted that an increasing number of the company’s employees are leveraging remote working opportunities to relocate abroad. “Now the UK competes with Southern Europe,” he said. “Before, younger people who wanted to build their careers would go to London. But these days, people are going [to Southern Europe] because they are attracted by better financial rewards, incentives from tax authorities, and the lifestyle.”
Countries like Portugal (pictured) and Italy have introduced attractive tax breaks aimed at under-35s to lure foreign talent and retain their own younger workforce. Lisbon, in particular, has emerged as a burgeoning start-up hub, while Italy is experiencing a surge in early-stage technology funding, reaching $2 billion (£1.8 billion) so far this year. Dealroom data indicates that Italy is on track for its second-best year of funding since 2021, bucking the trend of declining investment in other nations.
Yatsenko, a Ukrainian-born entrepreneur who moved to London after stints in Germany and Poland, emphasised that the UK government needs to take proactive steps to retain talent. “The Government needs to do better,” he urged, pointing out that rival countries are “creating environments to attract talent.”
Despite his concerns, Yatsenko acknowledged that the UK remains a competitive place to launch a fintech business. Revolut, headquartered in Canary Wharf, employs over 10,000 people worldwide and allows its staff to work fully remotely or on a hybrid basis. The company’s flexible working model has made it easier for employees to consider relocating without sacrificing their careers.
The exodus of young talent is not just a Revolut issue but a broader challenge facing the UK’s tech and finance sectors. Start-up founders have expressed worries that policy changes, such as increases to capital gains tax announced in October’s Budget, could disincentivise entrepreneurship and accelerate the talent drain.
Revolut’s growth trajectory has been impressive. Over the summer, the company secured a banking licence in the UK, paving the way to expand its range of regulated products, including plans to offer fully digital mortgages. The fintech firm also launched a secondary share sale, valuing the business at $45 billion. Yatsenko owns approximately 3% of the company, giving him a paper fortune exceeding $6 billion, according to data provider Beauhurst.
The company’s success comes amid a backdrop of rigorous performance oversight. Yatsenko noted that Revolut maintains its hybrid working model by closely monitoring staff performance. Under-performers are given a stark choice: leave immediately or improve within six weeks. This approach contrasts with other companies where managers have pushed to end home working due to concerns over productivity.
“I read it as managers do not know what people in their teams are doing—our approach is different,” Yatsenko explained. “Because there is this transparency in this way, we can be distributed.”
Revolut’s stance on remote working reflects a broader shift in workplace culture accelerated by the pandemic. However, it also highlights the challenges businesses face in retaining talent when employees have greater flexibility to choose where they live and work.
The UK has traditionally been a magnet for international talent, particularly in sectors like finance and technology. London, in particular, has been seen as a global hub offering unparalleled career opportunities. Yet, with remote working becoming more accepted and other countries offering competitive incentives, the UK’s position is being tested.
Tax incentives in countries like Portugal and Italy make them attractive destinations. Portugal’s Non-Habitual Resident (NHR) regime offers substantial tax benefits for new residents for up to ten years. Italy has implemented similar schemes, providing tax breaks to entice foreign professionals and returning Italian nationals.
These incentives, combined with a desirable lifestyle and lower cost of living, are proving hard to resist for many young professionals. The Mediterranean climate, cultural richness, and relaxed pace of life offer an appealing alternative to the UK’s often high-stress, high-cost environment.
Yatsenko’s comments serve as a wake-up call for policymakers. To retain its status as a leading hub for talent and innovation, the UK may need to reconsider its tax policies and invest in creating an environment that remains attractive to the younger workforce.
The government’s recent tax decisions have raised eyebrows in the start-up community. Increases in capital gains tax could discourage investment and entrepreneurship, potentially driving innovators to more favourable jurisdictions. The concern is that without competitive incentives, the UK could see a decline in new business ventures and a subsequent impact on the economy.
Revolut itself continues to thrive, reaching 50 million customers worldwide and boasting over 10 million users in the UK alone. The company’s plans to introduce fully digital mortgages signal its intent to disrupt traditional banking further. Initially launching these products in Lithuania, Ireland, and France, Revolut aims to bring them to the UK market, potentially offering consumers more streamlined and accessible financial services.
As the fintech landscape evolves, companies like Revolut are at the forefront of change. However, the ability to innovate and grow is closely tied to access to top talent. If the UK cannot retain its brightest minds, it risks falling behind in the global tech race.
In conclusion, Vlad Yatsenko’s warning sheds light on a critical issue facing the UK’s future as a centre for innovation and enterprise. The allure of remote working combined with competitive incentives abroad is leading to a talent exodus that could have long-term implications. It is imperative for the UK government and businesses to address these challenges to ensure that the country remains an attractive destination for the next generation of entrepreneurs and professionals.
