The iPhone 4 is still a great phone, so I'm not sure if it's necessary to replace it. However, there is definitely a significant speed increase with the iPhone 5 (or even the 4s). So if that matters to you then you might want to upgrade.
I think the larger screen, thinner design, and lighter weight all make the iPhone 5 worthy of consideration. Plus the better audio, 720P facetime camera and other stuff also makes it worth thinking about.
Here's a list of iPhone 5 features to help you make your decision: