Imagined being pretty, having lost pounds (5)

I believe the answer is:

fairy

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'imagined being' is the definition.
'fairy' can be an answer for 'being' (fairy is a kind of being). I am unsure of the 'imagined' bit.

'pretty having lost pounds' is the wordplay.
'pretty' becomes 'fairly' (I've seen this before).
'having lost' suggests deleting specific letters.
'pounds' becomes 'l' (abbreviation e.g. Lsd - pounds, shillings, pence).
'fairly' with 'l' removed is 'FAIRY'.

Can you help me to learn more?

(Other definitions for fairy that I've seen before include "Mythical being" , "Magical being" , "Creature of folklore" , "Cobweb, perhaps" , "Eg, Tinkerbell" .)

I've seen this clue in The Times.

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