diff --git a/lbry/lbry/wallet/manager.py b/lbry/lbry/wallet/manager.py
index d9e9f436c..f89c50df5 100644
--- a/lbry/lbry/wallet/manager.py
+++ b/lbry/lbry/wallet/manager.py
@@ -5,6 +5,7 @@ from binascii import unhexlify
 
 
 from torba.client.basemanager import BaseWalletManager
+from torba.client.wallet import ENCRYPT_ON_DISK
 from torba.rpc.jsonrpc import CodeMessageError
 
 from lbry.wallet.ledger import MainNetLedger
@@ -121,6 +122,9 @@ class LbryWalletManager(BaseWalletManager):
             log.info('Wallet at %s is empty, generating a default account.', default_wallet.id)
             default_wallet.generate_account(ledger)
             default_wallet.save()
+        if default_wallet.is_locked and default_wallet.preferences.get(ENCRYPT_ON_DISK) is None:
+            default_wallet.preferences[ENCRYPT_ON_DISK] = True
+            default_wallet.save()
         if receiving_addresses or change_addresses:
             if not os.path.exists(ledger.path):
                 os.mkdir(ledger.path)