Allotments 4 All

First time in growing chillis in jiffy 7's & pleased with the results so far.   ::)

My first question is - the plants are now about 3" tall, so do they now need to be potted on? 

Second question - as there are no roots growing from the base of the pellet, should I remove the outer casing when I do transplant them?

Any advice appreciated.

Luckydog   ;D