Encrypting your device may make it more secure, but it also makes it slower due to the added overhead. This is not much of a problem on a fast PC or laptop, as its hardware is able to cope with the extra load. It, however, is a major reason for concern on Android 5.0 Lollipop devices, such as Google's new Nexus 6. Android 5.0 Lollipop is at fault here.
Anandtech has discovered that the difference in performance can be as high as 80.7 percent, and as low as 50.5 percent, between Nexus 6 with encryption turned on and with the feature disabled. Meanwhile, those who update to Android 5.0 Lollipop on Nexus 5 will also notice a notable difference in performance, albeit not as big, even with encryption disabled.
Based on the test results published by Anandtech, the update to Android 5.0 Lollipop on Nexus 5 comes with a performance penalty as high as 45.4 percent, and as low as 1.3 percent, without factoring in the performance hit that comes when enabling encryption.
Luckily, encryption is not enforced by default, even if you make a clean install using a factory image. If you have upgraded to Android 5.0 Lollipop on a pre-Nexus 6 device, then using encryption is your call. On my Nexus 7 I have not noticed a major change, although it does not seem to run smoother either.
In both cases (Nexus 6 with and without encryption, and Nexus 5 without encryption), we are talking about storage performance. Random read, random write and sequently read speeds were used to test the performance penalty.
There are two aspects to Android 5.0 Lollipop worth detailing. The first is that it seems to make even powerful devices such as Nexus 5 slower compared to Android 4.4 KitKat. This likely explains why we are seeing Nexus 7 users complaining about their devices being slower following the update. Google should address this as soon as possible, in the next over-the-air update.
However (and this is the second issue), encryption is enforced out-of-the-box on Nexus 6. Anandtech had to ask Motorola for a Nexus 6 unit with encryption disabled to do the test. Virtually all users will not have that option. I sense that this policy will also apply to all future devices that come with Android 5.0 Lollipop out-of-the-box, unless vendors have anything to say about it.
Google is not doing its users any favors by making their devices seemingly more secure, but much slower. It should also figure out a way to encrypt users' devices with a smaller impact on performance, as, right now, the way encryption is done spoils the user experience. And, as more devices running Android 5.0 Lollipop are launched, the issue will only grow bigger. There may be a way around this, and that is to use storage with encryption support (like lots of SSDs do today). However, as Anandtech points out, the current eMMC chips do not.