PHP is an open-source programming language that runs on a web server. It is one of the most popular languages for web development; for example, all WordPress sites run on PHP.
PHP is a server-side script, meaning that it is executed on the web server, contrary to HTML, which is executed in the browser. By combining PHP with HTML, you can create dynamic websites, for example, sites built with WordPress, Joomla and Drupal.
All PHP versions have a life cycle of about three years, after which they are no longer supported.
After the initial release, a PHP version is actively supported for approximately two years. After that time, there will be 1-2 years of security support, meaning that there are only releases for critical security issues. During this phase, the next PHP version is already available.
When a PHP version reaches end-of-life, it does not get updated anymore, so after that time it's no longer secure to use it. You can check the PHP website to see which versions are currently supported.
That depends on how you've built your website. If your site is created with HTML, like Website Builder, then the PHP update has no effect at all.
If your site is created with PHP and the code is compatible with the new PHP version, your website will function the same or better. If you use a CMS like WordPress, you can probably notice some improvements in performance, provided you have updated WordPress to the latest version.
If you use code that is outdated and not supported in the newer version of PHP, then your site will give errors and may stop working altogether. For example, if you haven't updated your CMS to the latest version, or if your website uses custom code, for which an update isn't readily available. In that case, you need to update the code to make it compatible.