The bereaved family of a 91-year-old gran had a shock when they discovered she was a serial fraudster who had been fleecing the taxpayer for 35 years.

Ivy Johnson, of New North Road, Hoxton, had savings totalling £135,000 but paid just £7 of her £117 weekly rent, had a care allowance and paid no council tax.

She did it by pretending a bank account containing £9,000 was all she had, when in fact she had 15 times that amount in savings, premium bonds and even shares in Santander.

Her family discovered the dirty money after Ivy died two weeks ago and have tried to give it back to the authorities – but are having a hard time getting them to take it.

One relative, who didn’t want to be named for fear of creating a rift in the family, told the Gazette: “I nearly had a heart attack. I’m really angry. How can any family inherit £135,000 of taxpayers’ money?

“All these benefits, carers going in four times a day – you are meant to pay for it if you’ve got the money.

“What about these poor people who are homeless on the street?

“We’d have inherited out of this but there’s no way we could touch money like that. It’s an embarrassment to us.

“We want them to take it all back, but Hackney Council don’t seem bothered. I’ve not heard back from them. This is not £5,000 or £10,000 – it’s £135,000.

“I also called the benefit fraud hotline and they told me it will probably be written off because she’s dead!”

The relative said Ivy knew what she was doing, and had “all her marbles”.

“Money was her god,” she said. “Money, money, money. She was on about it all the time, even in her 90s. She was extremely dishonest.”

A Hackney Council spokeswoman said the town hall had passed the information on to the Department for Work and Pensions (DWP), which investigates cases of fraud.

The DWP did not comment when approached by the Gazette, referring us to its Freedom of Information department. Responses to FOI requests take a month and are not meant to disclose personal data.