Updating Kali Live Encrypted Persistence without reformatting

Hi, I can't seem to find a way to update my 2017.1 kali live encrypted persistence installation to 2018.1

I know that live installation is not really upgradable but the notification popped up in Application Center asking to update a system after restart. Would love to update but I'm afraid this will not update kernel and/or corrupt the whole installation.
I've found some posts about updating kernel manually, but maybe there is an easier way to update the whole thing at once? Maybe it's possible to do that from HDD installation or something like that?
Also, I'm guessing I need to remove LUKS encryption before updating..?
Would really appreciate a descriptive step-by-step procedure if such exists in this case :)

Regards,
Nik