If I update my iPad will I lose everything on it?

no.

Backup your iPad first and if something goes wrong, you can restore from the backup, I have never, ever lost anything when I updated any of my iDevices going back to iOS 3.x and I am now on iOS 6.1 the very latest iOS on my Pad 3.

What you should do anytime that you update the device is to transfer purchases from the iPad into iTunes - File>Transfer Purchases - and you should backup the iPad as well. When you update the update the device, if something goes wrong, you can restore from the backup.

If you have any other important files, you may want to transfer them to your computer as well, prior to the update.

Transfer purchases.

http://support.apple.com/kb/HT1848

How to backup and restore from a backup

http://support.apple.com/kb/HT1766