After my sister died I discovered to my horror that a niece she was very kind to had been drawing her pension for own benefit. The money was drawn for nine months, and £56 was even taken after her death, which I have had to pay back. I am anxious to know how much exactly was taken.
Your sister must have given the niece her bank card so she could collect the cash. So she was presumably aware that her niece was pocketing the money and happy for it to continue. This assumes that your sister had the mental capacity to do this; if she didn’t you should take further advice. I imagine you ended up refunding the £56 because you were executor of your sister’s will. You should ask the niece to return the money to your sister’s estate.