User named [Update Needed] after installing yosemite with encrypted drive
Log in into the Mac as administrator.
Backup the Mac with Time Machine (optional but recommended)
Launch System Preferences selecting System Preferences from the Apple menu.
Click the Security &amp; Privacy preference pane.
Click the FileVault tab.
Unlock the pane clicking on the padlock (administrator password required)
Disable FileVault and wait (…about 3hrs with a 250GB no SSD HD)
Restart the Mac (optional but recommended)
Go back the FileVault tab.
Enable FileVault and wait (…about 7hrs for me!!!)
Restart the Mac.
The unknown user account will disappear.
This should also now allow you to set automatic login.


Sources: FileVault and update needed at the login screen: How to solve
Fresh install of Yosemite adds [Update Needed] user
Login screen shows "update needed" but no updates are available