diff --git a/src/aiida/storage/psql_dos/utils.py b/src/aiida/storage/psql_dos/utils.py
index 8fa50053b1..f1bf0aa4dd 100644
--- a/src/aiida/storage/psql_dos/utils.py
+++ b/src/aiida/storage/psql_dos/utils.py
@@ -31,17 +31,20 @@ def create_sqlalchemy_engine(config: PsqlConfig):
         See https://docs.sqlalchemy.org/en/13/core/engines.html?highlight=create_engine#sqlalchemy.create_engine for
         more info.
     """
+    from urllib.parse import quote_plus
+
     from sqlalchemy import create_engine
 
     # The hostname may be `None`, which is a valid value in the case of peer authentication for example. In this case
     # it should be converted to an empty string, because otherwise the `None` will be converted to string literal "None"
     hostname = config['database_hostname'] or ''
     separator = ':' if config['database_port'] else ''
+    password = quote_plus(config['database_password'])
 
     engine_url = 'postgresql://{user}:{password}@{hostname}{separator}{port}/{name}'.format(
         separator=separator,
         user=config['database_username'],
-        password=config['database_password'],
+        password=password,
         hostname=hostname,
         port=config['database_port'],
         name=config['database_name'],
diff --git a/tests/cmdline/commands/test_setup.py b/tests/cmdline/commands/test_setup.py
index 613e77dbb6..6f5a693c6e 100644
--- a/tests/cmdline/commands/test_setup.py
+++ b/tests/cmdline/commands/test_setup.py
@@ -207,7 +207,7 @@ def test_setup(self):
         postgres.determine_setup()
         db_name = 'aiida_test_setup'
         db_user = 'aiida_test_setup'
-        db_pass = 'aiida_test_setup'
+        db_pass = '@aiida_test_setup'
         postgres.create_dbuser(db_user, db_pass)
         postgres.create_db(db_user, db_name)