If your TV has the capability of telling you the signal is 480, that means your TV has the capability of a higher resolution.
If you are watching freeview via an aerial cable plugged directly into the TV, the built in tuner may only be able to view standard definition TV. Nothing better for you I'm afraid.
If you are using standard Sky or Sky+ 480 is the best you are going to get.
If it's Sky HD that you have, the Sky box needs to be connected via an HDMI cable to the TV.
Then the settings of the Sky HD box needs to be changed to 720 first, to see if that works. Then 1080. The settings on your sky box will check that you can see an improved picture, or any picture at all before allowing you to continue.
On your Sky remote, follow these instructions;
Settings - Picture - HD Resolution Output.
Read the on screen instructions.