It is very important that WordPress and any plugins and themes are kept up-to-date for several reasons:
- Security - this is the most important reason. WordPress is a huge target for hackers and other malicious online types - being able to hack WordPress means instant access to over 50 million websites and the ability to read their secure content, insert dodgy links or do other bad things. WordPress is continually identifying and fixing security risks and holes. These fixes are released as WordPress updates. If you don't update your WordPress, you're leaving known security risks in place, which means that sooner or later your site will probably be hacked. This could have serious impact on your business, as well as costing you time, effort and money to fix.
- Performance - the WordPress team put a lot of time and effort into making WordPress faster and more efficient. Keeping your WordPress updated means that your site is performing as well as it can.
- Features - Major releases of WordPress typically include improved functionality and tools to allow you to get more from your site.
- User experience - Most updates to WordPress make the content management system quicker, easier and generally nicer to use, encouraging you to interact with your site more.
- Future-proofing - at some point, you're bound to want changes made to your site. Those changes might require the latest version of WordPress (for example to use a particular plugin that only works with newer versions). By updating frequently, you pick up small changes and errors that need to be attended to on an ongoing basis, keeping your site reasonably up-to-date with the core of WordPress development. If you don't update for a year or two, you're far more likely to suffer major disruption when you do, because all of those small and minor issues have become intertwined, making diagnosis and fixing harder and more time-consuming (and expensive).
These are the main reasons I can think of to keep WordPress updated, but there's also a broader, more fundamental reason. Good Housekeeping. Why use the world's leading publishing platform and then not keep it updated? It's like buying a Mercedes and not getting it serviced. So: keep your WordPress installation up-to-date. It's more than just software, it's part of your business.