The most common and most likely answer to this crossword clue is the 3 plus 2 letter word PIG IT
I've seen this crossword clue in The Daily Telegraph
P
I
G
I
T
More clues leading to the result PIG IT
Buddy explains!

The straight part
We know that "Live in squalid conditions" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case live in squalid conditions = pig it.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.