Pay out pounds for fun (4)
I believe the answer is:
play
'fun' is the definition.
(I know that fun can be written as play)
'pay out pounds' is the wordplay.
'out' means one lot of letters goes inside another.
'pounds' becomes 'L' (abbreviation e.g. Lsd - pounds, shillings, pence).
'pay' enclosing 'l' is 'PLAY'.
'for' is the link.
(Other definitions for play that I've seen before include "Drama; engage in games" , "Slack - performance" , "Work for actors" , "Stage drama" , "Freedom of movement" .)