Pounds I applied to allowance (7)

I believe the answer is:

pension

'to allowance' is the definition.
(thesaurus)

'pounds i applied' is the wordplay.
'pounds' becomes 'pens'.
'applied' becomes 'on'.
'pens'+'i'+'on'='PENSION'

(Other definitions for pension that I've seen before include "Retirement allowance" , "Payment to traitor" , "Retired person's income" , "Retirement pay in a Continental boarding-house" , "Nice little hotel" .)

I've seen this clue in The Sunday Times and The Times.

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