RETIRED public sector workers will receive a 3.1 per cent rise in their occupational pensions from April 1.

An order will be laid before this month's sitting of Tynwald.

The increase is the same as in the United Kingdom - which is required by current legislation - where the basis for such inflationary rises has been changed from the Retail Price Index (RPI) to the Consumer Prices Index (CPI).

It has changed to the CPI as the CPI is considered a more accurate measure of inflation for most households as it uses a wider range of goods and services than the RPI and it also allows for consumers to switch between interchangeable items based on price.

CPI also excludes housing costs which is considered more appropriate in the case of pensions as many pensioners have re-paid their mortgages and so are not incurring significant housing costs.

Treasury Minister Anne Craine MHK said: "This order provides for the annual increase to public sector occupational pensions to allow for rises in the cost of living.

"It is important that this established policy is maintained in order to protect the affected pensioners' real incomes."

The Isle of Man Government is currently consulting with the relevant trades unions concerning the introduction of the Isle of Man Unified Pension Scheme for local public sector workers.

The government said the unified scheme is intended to ensure local public sector workers continue to enjoy good pensions that are affordable and sustainable for the Manx taxpayer.

It has undertaken to maintain the existing public sector pensions arrangements in line with the UK prior to the completion of the consultation - and the subsequent implementation - of the unified scheme.