Is a 50mm f/1.8 or 50mm f/1.4 a good lens for portraits in low light?

I personally have the 1.8 and my friend the 1.4. Obviously the 1.4 is much better build quality and fairly better optically, but the 1.8 is a bargain and still a good lens as long as you don’t plan on throwing it around. Also more easily replaced if it breaks. Both give pleasing pictures and both will be better in low light than your current lens…
but..

..in your example you give these lenses would not improve the picture in the way you want. The christmas tree would still be the source of light and the people would still be underexposed in front of it. The lenses would both make the ability for faster shutter speeds or lower ISO’s, but the lighting ratio in your picture would still be the same.

To get the picture you are after you would still need some illumination on your subjects to expose them better with the tree. As it is dark a reflector wouldn’t be much use, so it’s more likely you will need to use some flash, but don’t put it on auto. Use your camera (I’d prefer in manual) to expose for the tree, and then use the flash as fill light, probably dialling in some flash exposure compensation of -1 or -2 stops so that the light is mostly only lighting their faces and not affecting the already lit background so much.

It’ll likely take some tinkering to get the right ratio of lighting that you want, but using a faster lens is only going to mean more bokeh (which will be nice for the tree potentially) and the ability to shoot faster, it won’t magically bring your subjects out of the low light whilst leaving the background as it was.