Young professionals are leaving the UK in favor of sunnier climates and more favorable 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, especially in the competitive fintech sector.
Yatsenko, who co-founded Revolut with CEO Nik Storonsky in 2015, highlighted that an increasing number of the company’s employees are taking advantage of remote working options to move abroad. “Now Britain is competing with southern Europe,” he said. “It used to be that younger people who wanted to build their careers would go to London. But nowadays people go [to Southern Europe] because they are attracted by better financial rewards, tax incentives and lifestyle.”
Countries such as Portugal (pictured) and Italy have introduced attractive tax breaks aimed at under-35s to attract foreign talent and retain their own younger workforce. Lisbon in particular has emerged as a burgeoning start-up hub, while Italy is experiencing a boom in early-stage technology funding, which has reached $2 billion (£1.8 billion) so far this year. Dealroom data shows Italy is on track for its second-best financing year since 2021, bucking the trend of declining investment in other countries.
Yatsenko, a Ukrainian-born entrepreneur who moved to London after stints in Germany and Poland, stressed that the British government must take proactive steps to retain talent. “The government must do better,” he urged, noting that rival countries are “creating environments to attract talent.”
Despite his concerns, Yatsenko acknowledged that Britain remains a competitive place to launch a fintech company. Headquartered in Canary Wharf, Revolut employs more than 10,000 people worldwide and enables its workforce to work fully remotely or on a hybrid basis. The company’s flexible working model has made it easier for employees to move without sacrificing their careers.
The exodus of young talent is not just a Revolut problem, but a wider challenge facing the UK technology and finance sectors. Start-up founders have raised concerns that policy changes such as capital gains tax hikes announced in the October Budget could discourage entrepreneurship and accelerate the drain of talent.
Revolut’s growth trajectory has been impressive. Over the summer, the company secured a banking license in Britain, paving the way for the expansion of its range of regulated products, including plans to offer fully digital mortgages. The fintech company also launched a secondary share sale, valuing the company at $45 billion. Yatsenko owns about 3% of the company, giving him a paper fortune of more than $6 billion, according to data provider Beauhurst.
The company’s success comes against the backdrop of strict monitoring of performance. Yatsenko noted that Revolut maintains its hybrid working model by closely monitoring staff performance. Underperformers are given a clear choice: leave immediately or improve within six weeks. This approach contrasts with other companies where executives have pushed to end working from home due to productivity concerns.
“I read it because managers don’t know what the people in their teams are doing – our approach is different,” Yatsenko explains. “Because there is transparency this way, we can be distributed.”
Revolut’s stance on remote working reflects a broader shift in workplace culture that has been accelerated by the pandemic. However, it also highlights the challenges companies face in retaining talent when employees have greater flexibility to choose where they live and work.
Britain has traditionally been a magnet for international talent, especially in sectors such as finance and technology. London in particular is seen as a global hub offering unparalleled career opportunities. But as remote working becomes more accepted and other countries offer competitive incentives, Britain’s position is being tested.
Tax breaks in countries such as Portugal and Italy make them attractive destinations. Portugal’s non-habitual resident regime (NHR) offers significant tax benefits for new residents for up to ten years. Italy has implemented similar schemes, offering tax breaks to entice foreign professionals and returning Italian nationals.
These incentives, combined with a desirable lifestyle and lower cost of living, prove difficult to resist for many young professionals. The Mediterranean climate, cultural wealth and relaxed pace of life offer an attractive alternative to the often stressful and expensive environment of Britain.
Yatsenko’s comments serve as a wake-up call for policymakers. To maintain its status as a leading center for talent and innovation, Britain may need to rethink its tax policy and invest in creating an environment that remains attractive to the younger workforce.
The government’s recent tax decisions have raised eyebrows among the startup community. Increases in capital gains taxes could discourage investment and entrepreneurship, potentially driving innovators to more favorable jurisdictions. The concern is that without competitive incentives, Britain could experience a decline in the number of new business ventures and a resulting impact on the economy.
Revolut itself continues to thrive, reaching 50 million customers worldwide and has over 10 million users in the UK alone. The company’s plans to introduce fully digital mortgages indicate that the company wants to further disrupt traditional banking. By 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 the change. However, the ability to innovate and grow is closely linked to access to top talent. If Britain cannot retain its brightest minds, it risks falling behind in the global technology race.
In conclusion, Vlad Yatsenko’s warning sheds light on a critical issue facing Britain’s future as a center for innovation and entrepreneurship. The appeal of remote work combined with competitive incentives abroad is leading to a talent exodus that could have long-term consequences. It is imperative that the UK government and businesses address these challenges to ensure the country remains an attractive destination for the next generation of entrepreneurs and professionals.