I was thinking about using 30mm insulated plasterboard which runs all the way up to the ceiling. I'm not sure about the effectiveness of the 30mm insulated plasterboard compared to having a thicker insulation in the timber frame
30mm of polystyrene will be roughly half as insulating as 100mm of mineral wool in the studwork.
Mineral wool would also be a better acoustic insulator, if that matters to you.
I'd fit both. Or if you don't want to do that for some reason, fit polystyrene (or PIR etc) over the blockwork, then extend the studwork with battens of the same thickness (or maybe just use thicker studwork timber, overhanging the top of thr blockwork???), and board over all of it.