I want to give my phone to my sister, and don't want to factory rest the phone as I don't want to loose the latest s/ware on the phone? Can I do this but erase all my personal data ?
No. Besides, selecting the "Erase All Contents and Settings" option will NOT remove the current iOS version. It will simply remove EVERYTHING that is not installed on the device by default. Afterwards, you will be met with the welcome screen.