I have still got an old paper licence (as have my ma and pa and a few of my friends!) and haven't been told to change it. I did look at exchanging the old one for a new one with the ol' mugshot on, but the cost put me of off!
I have lived in the same house for 19 years now - I have a paper license and am not going to pay �19 plus the cost of photots to change things until they tell me I have to.
At the time you have to send you licence to DVLA for change name, change of address, or points then they would ask you to fill out a new form and sending in a photo. Wave goodbye to your paper licence. It would be no charge.