In the UK encryption is not illegal, but possession of data believed to be encrypted, which you cannot or will not decrypt upon demand, is a crime of its own, punishable by two years imprisonment (no link to terrorism required -- 5 years maximum sentence of any link is suspected).

It needn't be the security services, or even the police; cases can be brought by the taxman. This has been the case for the last 10 years or so, the new law will extend these powers.

https://wiki.openrightsgroup.org/wiki/Regulation_of_Investig...