Upgrading GPU?

I built a computer in 2010 and most of the stuff was top of the range but obviously PC components get outdated really quick. Some of the latest games coming out e.g Skyrim I would love to play on best quality graphics but its not possible with this setup anymore... anyway here is a list of my components...
AMD Phenom II x4 955 3.2ghz
8GB Ram
Gigabyte AM3 Motherboard
Gigabyte GT 220

Am I right in thinking I really only need to upgrade my graphics card? If so can anyone give us a hand in choosing one (budget around £150)
Cheers.