Revolut’s founder warns of an exodus of British talent amid far-reaching work change

Young professionals are leaving the UK in favor of the warmer climate and favorable tax laws of Southern Europe, according to Vlad Yatsenko, the billionaire founder and chief technology officer of digital banking giant Revolut.

This trend, he warns, poses a serious challenge to Britain’s position as a hub for global talent, particularly in the competitive fintech sector.

Yatsenko, who co-founded Revolut in 2015 with CEO Nik Storonsky, emphasized that an increasing number of the company’s employees are taking advantage of remote work opportunities to relocate to other countries. “Now the UK is competing with Southern Europe,” he said. “In the past, young people who wanted to build their careers went to London. But these days, people are moving [to Southern Europe] because they are attracted by better monetary rewards, incentives from the tax authorities, 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 young workforce. Lisbon, in particular, has emerged as a booming startup hub, while Italy is experiencing a boom in tech funding, reaching $2 billion (£1.8 billion) so far this year. Dealroom data shows that Italy is on track for its second best year of revenue since 2021, in line with a trend of declining investment in other nations.

Yatsenko, a Ukrainian-born entrepreneur who moved to London after living in Germany and Poland, insisted the UK government needed to take tougher measures to retain talent. “The government needs to do better,” he urged, pointing out that rival countries “create places to attract talent.”

Despite his concerns, Yatsenko admitted that the UK remains a competitive place to start a fintech business. Revolut, headquartered in Canary Wharf, employs more than 10,000 people worldwide and allows its employees to work remotely or on a hybrid basis. The company’s flexible operating model has made it easy for employees to consider relocating without sacrificing their jobs.

The migration of young talent is not just a problem for Revolut but a wider challenge facing the UK technology and finance sectors. Emerging entrepreneurs have expressed concern that policy changes, such as the increase in capital gains tax announced in October’s Budget, could stifle entrepreneurship and accelerate the squeeze on talent.

Revolut’s growth has been positive. In the summer, the company received a banking license in the UK, paving the way to expand its range of regulated products, including fully digital credit systems. The fintech company also launched a second share sale, valuing the business 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 amid strong operational oversight. Yatsenko noted that Revolut maintains its hybrid operating model by monitoring employee performance. Underperformers are given a stark choice: leave immediately or improve in six weeks. This approach is different from other companies where managers are pushing to eliminate working from home due to productivity concerns.

“I read it as managers don’t know what their team members are doing—our approach is different,” explained Yatsenko. “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 in choosing where they live and work.

The UK has long been a magnet for international talent, particularly in sectors such as finance and technology. London, in particular, has been recognized as a global hub offering unparalleled career opportunities. However, as remote working becomes more widely accepted and other countries offer 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 significant tax benefits to new residents for up to ten years. Italy has implemented similar programs, offering tax breaks to attract foreign professionals and returning Italian citizens.

These incentives, combined with the desirable lifestyle and low cost of living, seem hard to resist for many young professionals. The Mediterranean climate, cultural richness, and relaxed standard of living provide an attractive alternative to the often high-pressure, expensive UK environment.

Yatsenko’s comments serve as a wake-up call for policy makers. To maintain its status as a leading hub for talent and innovation, the UK may need to take a closer look at its tax policies and invest in creating an environment that continues to attract young workers.

The government’s recent tax decisions have caused a stir in the emerging community. An increase in capital gains tax may discourage investment and entrepreneurship, which may drive innovators into favorable areas. The concern is that without competitive advantages, the UK could see a decline in new business and the 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 credit show that it aims to disrupt traditional banking. Initially launching these products in Lithuania, Ireland, and France, Revolut aims to bring them to the UK market, potentially providing consumers with simple and accessible financial services.

As the fintech landscape changes, companies like Revolut are at the forefront of change. However, the ability to innovate and grow is closely related to access to top talent. If the UK can’t keep up with its brightest minds, it risks falling behind in the global technology race.

In conclusion, Vlad Yatsenko’s warning sheds light on the critical issue facing the future of the UK as a center for innovation and entrepreneurship. The lure of remote working combined with incentives to compete abroad is leading to an exodus of talent that can have long-term impact. It is imperative that the UK government and businesses address these challenges to ensure that the country remains an attractive destination for the next generation of entrepreneurs and professionals.