Does my MacBook Air need updating to macOS Big Sur

Only you can make that decision, if you want to run the latest versions of Apple apps or other developers apps you may have to upgrade to macOS Big Sur.

Before upgrading to a newer OS you need to find out if apps you use at the moment have updates available so they will continue to work if you upgrade to macOS BigSur, you cannot assume that they will. Contact the developers of any third party apps you use now to see if these apps are supported under macOS Big Sur.

The same goes for any printers/ scanners or other hardware you use with you mac do not assume they will continue work

with macOS Big Sur. Again contact the manufacturers of such devices to find out if they are still being supported in macOS Big Sur.

The other thing you need to find out is can your mac actually upgrade to macOS Big Sur.

Read this,

How to upgrade to macOS Big Sur - Apple Support

Read Section 1.

macOS Big Sur is compatible with the following computers. If your Mac isn't compatible, you might be able to install an old version of macOS instead.

MacBook introduced in 2015 or later

MacBook Air introduced in 2013 or later

MacBook Pro introduced in late 2013 or later

Mac mini introduced in 2014 or later

iMac introduced in 2014 or later

iMac Pro

Mac Pro introduced in 2013 or later

View the complete list of compatible computers.

If upgrading from macOS Sierra or later, your Mac needs 35.5GB of available storage to upgrade. If upgrading from an earlier release, your Mac needs up to 44.5GB of available storage. To upgrade from OS X Mountain Lion, first upgrade to OS X El Capitan, then upgrade to macOS Big Sur.

A lot of things to consider so give it some thought and do the necessary research.

And before you do anything make sure you have a full backup of your mac before you upgrade,

this will protect you in case the upgrade goes wrong or give you an out should you decide

to downgrade back to your previous OS if Big Sur does not meet your expectations.