The ISP to which you connect, has a range of what are called IP numbers and when you connect it will allocate you a number or IP address. That address will be presented to every website you visit, so the website knows where to deliver the data back to you.
Some people even have a static, permanent IP address, one which they always retain and it never changes. I have four such permanent addresses allocated to me and me alone.
What a VPN does, is act as a repeater, or intermediary, between you and the sites you may visit. It will present one of its IP addresses to a site you visit, rather than your actual IP address allocated by your ISP. In that way, it your enures your complete privacy and anonymity.
You only need a VPN, if you are obsessed about your privacy, or maybe download illegal things which you should not.