The eldest child of Valma and Eric Stockton, she was named after Lorna Doone. Sage was born at Hanmer, Flintshire, Wales, and educated at the village school, then at the Girls' High School in Whitchurch, Shropshire. Her childhood in the late 1940s and early 1950s is recalled in her last book Bad Blood. Sage became pregnant when she was 16 but was able to continue her education and won a scholarship to read English at Durham University, only after the university changed its admission rules to allow married couples to study there. Sage went on to receive an MA from Birmingham University for a thesis on seventeenth century poetry.

All of her academic career was spent at the University of East Anglia, where she was Professor of English Literature from 1994. She edited The Cambridge Guide to Women's Writing in English (1999) which has become a standard work. In the Preface she wrote: "In concentrating on women's writing...you stress the extent and pace of change, for the scale of women's access to literary life has reflected and accelerated democratic, diasporic pressures in the modern world".

Sage's book reviews appeared in the London Review of Books, The Times Literary Supplement, the New York Times Book Review and The Observer, mentioning the works of Angela Carter, as well as covering studies of works of numerous authors, including Christina Stead, Doris Lessing, Thomas Love Peacock, John Milton and Thomas Hardy.

Her autobiographical memoir Bad Blood was a tragic story of childhood disappointment in a family where warped behaviour is passed down the family from generation to generation. The book won the Whitbread Biography Award on 3 January 2001 a week before Sage died in London, having suffered from emphysema for most of her life. The book missed out on receiving the accolade of Whitbread Book of the Year at the award ceremony on 23 January 2001.

Sage married Victor Sage while still in her teens and their daughter, Sharon, was born in 1959 just before they went up to Durham University. They were later divorced and Sage married Rupert Hodson in 1979.