My iPhone 5 is fully paid off what can i upgrade it to?

iPod and Mobile Phone Recycling Program - https://www.apple.com/recycling/ipod-cell-phone/ - Get an Apple Store Gift Card for the value of your old device.

https://www.apple.com/iphone/trade-up/ - Just trade in your eligible smartphone, and then use the credit to lower the full cost of a new iPhone or to reduce the monthly payments with your carrier.

You can certainly upgrade, but I wouldn't recommend it. It's barely worth anything in trade-in value, but you can certainly keep it around as a backup.