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.
He warns that this trend poses a major 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 Nick Storonsky, stressed that a growing number of the company’s employees are taking advantage of remote work opportunities to move abroad. He added: “Now the UK is competing with southern Europe.” “Before, young people who wanted to build their careers would go to London. But these days, people go[to southern Europe]because they attract better financial rewards, incentives from tax authorities, and the lifestyle.
Countries such as Portugal (pictured) and Italy have introduced attractive tax breaks targeting under-35s to attract foreign talent and retain their younger workforce. Lisbon, in particular, has emerged as a thriving hub for startups, while Italy is seeing a boom in early-stage technology funding, reaching $2bn (£1.8bn) so far this year. Deal Room data suggests Italy is on track to have its second-best year of financing since 2021, bucking a trend of declining investment in other countries.
Yatsenko, a Ukrainian-born businessman who moved to London after stints in Germany and Poland, stressed that the UK government needed to take proactive steps to retain talent. He urged that the government “do better,” noting that competing countries “create environments to attract talent.”
Despite his concerns, Yatsenko acknowledged that the UK remains a competitive place to launch a fintech business. Revolut, which is headquartered in Canary Wharf, employs more than 10,000 people globally and allows its employees to work entirely 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 revolutionary issue, it is a broader challenge facing the UK technology and financial sectors. Startup founders have expressed concerns that policy changes, such as increases in capital gains tax announced in the October Budget, could discourage entrepreneurship and accelerate talent drain.
Revolut’s growth trajectory has been impressive. Over the summer, the company obtained a banking license in the UK, paving the way for expanding its range of regulated products, including plans to offer fully digital mortgages. The fintech company also launched a secondary share sale, valuing the business at $45 billion. Yatsenko owns roughly 3% of the company, giving him a paper fortune exceeding $6 billion, according to data provider Bowhurst.
The company’s success comes amid strict monitoring of performance. Yatsenko noted that Revolut maintains its hybrid business model by closely monitoring employee performance. Underperforming employees are given a stark choice: leave immediately or improve within six weeks. This approach contrasts with other companies where managers have pushed to end working from home due to concerns about productivity.
“I read it because managers don’t know what people in their teams do. Our approach is different,” Yatsenko explained. “Because we have that transparency that way, we can distribute.”
Revolut’s stance on remote work 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 more flexibility in choosing where they live and work.
The UK 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. However, with remote working increasingly accepted and other countries offering competitive incentives, the UK’s position is being tested.
Tax incentives in countries such as Portugal and Italy make them attractive destinations. Portugal’s non-habitual resident (NHR) regime offers significant tax benefits to new residents for up to ten years. Italy has implemented similar schemes, offering tax breaks to entice foreign professionals and returning Italian citizens.
These incentives, combined with a desirable lifestyle and low cost of living, have proven difficult to resist for many young professionals. The Mediterranean climate, cultural richness and relaxed pace of life provide an attractive alternative to the often high-stress and high-cost environment of the UK.
Yatsenko’s comments served as a wake-up call to political decision-makers. To maintain its position 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 a young workforce.
The government’s recent tax decisions have raised eyebrows in the startup community. Increases in capital gains tax could discourage investment and entrepreneurship, which could push innovators to more favorable 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 offer fully digital mortgages signal its intent to further disrupt traditional banking. Revolut initially launched these products in Lithuania, Ireland and France, and aims to bring them to the UK market, potentially providing consumers with simpler and more 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 linked to access to the best talent. If the UK cannot retain its brightest minds, it risks falling behind in the global technology race.
In conclusion, Vlad Yatsenko’s warning highlights a critical issue facing the UK’s future as a hub for innovation and enterprise. The allure of remote work, combined with competitive incentives abroad, is leading to a talent migration that may have long-term effects. It is essential 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.