I've been using AVG/Avira/Avast free Anti-Virus software programs for... ever. I've never needed a paid subscription.
No. You don't need it unless you or another user of the computer are the type to go surfing the wrong sites, downloading the wrong software packages (without scanning before running), or generally do crap you shouldn't be doing on a computer.
Most free AVs will behave just the same, they will ask you to pony up for an upgrade.
Free AVs, including Windows own security should be enough for most users.
Even after you buy the AV they might ask you to buy the whole security suite.
Even then, they might ask you to buy either storage or even personal protection...it never ends.
It will be up to you, if those extra features are worth.
I have just download AV anti virus software. It now tells me I need real time protection which I have to pay for. Is this necessary?
There are a number of free antivirus apps including windows defender.
They protect against known viruses.
For most users, that is adequate.
More sophisticated apps will try to sense new "in the wild" viruses that have not been seen before.
If you are really paranoid, or you frequent sketchy porn sites, then be prepared to pay for a more sophisticated antivirus app.
And.. be prepared to consume added cpu resources in the process.
Regardless of what antivirus app you have, infection is always a possibility.
Prepare yourself for that by implementing some sort of a backup and recovery process.
A free antivirus is fine and enough for most of our personal or home computer, you'll probably need to upgrade to a paid or business-class security plan when you are running a business that requires an absolute safe environment. So, unless you need it, Just ignore the "warning" messages.
An antivirus, free or not, paired up with an anti-spyware/anti-malware is always the best option. I've been using free anti-viruses for a long time and had not problems what so ever. Mostly because if it misses something, the anti-malware program will almost always pick it up. As long as you visit trusted sites, have some sort of browser extension to block adds, and don't download random files, you should be fine.
It is entirely up to you whether you choose to upgrade your antivirus software. Specifically to Avast, we strongly believe in providing a best-in-class free antivirus that offers our core shields (which includes real-time and behavioral protection)
Many of our users do choose to upgrade depending on the features they are looking for. For example, we have an advanced and highly configurable firewall, an additional layer of ransomware security, and even Webcam Shield to prevent webcam snooping in our premium versions (features differ depending on which version you pick, of course!) A good comparison of the options is here. With any of our options, you won't need an "additional" product to protect against malware as Avast handles both.