[I've updated this 2015 post to refer to the section numbers in the Investigatory Powers Act 2016. As far as I can see, the powers contained in the Act are the same as those proposed in the draft Bill]
Most portable devices – laptops, smartphones and memory sticks – should be encrypted so that the information they contain is protected if the device is lost or stolen. Many countries (including the UK) give their immigration and other authorities legal powers to demand that you decrypt an encrypted device though given the number of laptops that cross borders every day only a tiny minority seem to be subject to such demands.
The amount of information stored in encrypted form is steadily increasing, supported by recommendations from the Information Commissioner and others. When deciding to adopt encryption, it’s worth planning for what might happen if the police or other authorities need to access it in the course of their duties.