A series of miscalculations led to the government setting the living wage at the wrong rate every year going back to 2017.

However, as the calculation resulted in the level being set higher than intended, it has probably benefited some working people.

The mistakes mean that the living wage was set at £8.61 in 2017 instead of £7.81 as it should have been.

There was no living wage figure set for 2018 but, for 2019 it was set at £9.76 instead of the recalculated figure of £8.93, in 2020 it was £10.19 instead of £9.48 and for 2021 it was £10.87 instead of £9.63.

The announcement came as this year’s living wage for 2022 was calculated at £11.05 an hour. This equates to a weekly wage, before tax, of £414.38 and an annual salary of £21,547.50, based on the assumption of a 37.5-hour working week.

The living wage is the voluntary rate of pay that businesses can use to pay their staff to ensure they can afford the basic opportunities and choices necessary for them to participate in society.

As part of a programme of improved quality assurance, Statistics Isle of Man (formerly Economic Affairs) identified miscalculations due to the wrong figures being used around the cost of having children.

The methodology used to reach the incorrect figures has now been corrected and in future the Centre for Social Policy Research at Loughborough University will be externally validating the figures.

Treasury Minister Dr Alex Allinson said that it is ‘essential that individuals and businesses have confidence that the methodology used to calculate the living wage is robust and accurate’.

He added: ‘The historical miscalculation is regrettable and I hope external verification by a respected academic body in the field of social policy provides assurance.

‘The Council of Ministers has agreed that the Isle of Man Living Wage calculation should be externally validated on an annual basis to ensure independent oversight and maintain business and public confidence.’

As part of the Island Plan, the government has committed to ensuring that the island’s minimum wage should rise to meet the living wage by 2025.