Seed Saving from Chilli Peppers
Sweet peppers and hot chilli peppers are both members of the same species. Pepper flowers are self pollinating, and will set fruit without any insect activity. However, they will also cross readily, and sweet peppers will happily cross with chillies.
You need to isolate plants by around 50 metres from any other peppers or chillies growing nearby. Even if you are only growing one variety be careful about other varieties growing in adjacent gardens or allotments.
If you want to grow several varieties, or if your near neighbours are also growing peppers, you could consider making an isolation cage to cover three or four plants.
To save the seed, take peppers on your isolated plants which have ripened fully to their final colour (usually yellow or red). Cut the peppers open carefully, and rub the seeds gently off of the ‘core’ onto a plate. Wear rubber gloves to deseed chillies, as the chilli oil sticks to your fingers and is very hard to wash off.
Dry the seeds in a warm but not hot place until they snap rather than bending.