It fell by £18.2m to £111.5m from £129.7m the previous year.
The decline was caused mainly by a fall in income from one-off appeals and fundraising events, which were £13m down on the previous year. Legacy income also fell by £3.2m.
Overall, the charity’s income fell from £385.5m to £367.9m, a decline of £17.6m, or 4.6 per cent.
The charity spent a record amount of £384.6m, giving it a shortfall of £16.7m on the year.
Free reserves fell by £12.7m to £26.5m, which the charity said was in line with its overall target.
Bob Humphreys, finance director at Oxfam, said: "It is not surprising that challenging times for the economy have affected our income.
"We are fortunate that regular donations held up well, but the lack of a single, high-profile emergency appeal alongside an unexpected shortfall in legacy income led to a drop in the overall contribution from UK public fundraising."After several years of pressure on household incomes, people are buying fewer new clothes and other items, which has a knock-on effect on the quantity and quality of donations to our shops. We need confidence in the UK economy to return."